When comparing activity-based costing (ABC) with conventional costing methods, which of the following is the key benefit of the ABC method?
A) It is cheaper to implement.
B) It is based on only one or two factors, generally volume-related.
C) It is simpler.
D) It provides more accurate cost numbers.

Question

Quizplus · Accepted Answer

Activity-based costing provides more accurate cost numbers because it allocates overhead costs based on multiple activities and cost drivers, rather than just volume-related measures.

When Comparing Activity-Based Costing (ABC) with Conventional Costing Methods, Which