In an activity-based costing (ABC) system, what should be used to assign departmental manufacturing overhead costs to products produced in varying lot sizes?
A) A product's ability to bear cost allocations.
B) A single cause-and-effect relationship.
C) Multiple cause-and-effect relationships.
D) Relative net sales values of the products.

Question

Quizplus · Accepted Answer

Activity-based costing uses multiple cause-and-effect relationships to allocate overhead costs more accurately to products based on the activities that generate those costs.

In an Activity-Based Costing (ABC) System, What Should Be Used