The amount of resources used in an activity-based costing (ABC) system for a specific activity is computed by multiplying the:
A) cost driver rate by the actual cost driver volume.
B) cost driver rate by the planned cost driver volume.
C) overhead rate by the actual cost driver volume.
D) overhead rate by the planned cost driver volume.

Question

Quizplus · Accepted Answer

In an ABC system, the cost of resources used for a specific activity is calculated by multiplying the cost driver rate by the actual cost driver volume, reflecting the actual consumption of resources.

The Amount of Resources Used in an Activity-Based Costing (ABC)