An activity-based cost allocation system:
A)Is one form of a direct or variable costing system.
B)Does not provide total unit cost data.
C)Traces costs to products on the basis of activities performed on them.
D)Does not provide for the allocation of any cost to products that cannot be directly traced to those products.
E)Does not involve the level of detail and the number of allocations that companies make with traditional allocation methods.

Question

Quizplus · Accepted Answer

Activity-based cost allocation system traces costs to products on the basis of activities performed on them. It goes beyond traditional allocation methods by considering the specific activities that lead to costs and allocating those costs accordingly.

An Activity-Based Cost Allocation System