Which best describes the flow of overhead costs in an activity-based costing system?
A)overhead costs - direct labour cost or hours - products
B)overhead costs - products
C)overhead costs - activity cost pools - cost drivers - products
D)overhead costs - machine hours - products

Question

Quizplus · Accepted Answer

In an activity-based costing system, overhead costs are first assigned to activity cost pools based on their underlying cost drivers. Then, the cost of each activity pool is allocated to the products that benefited from the activity. Therefore, the flow of overhead costs in an activity-based costing system is overhead costs - activity cost pools - cost drivers - products.

Which Best Describes the Flow of Overhead Costs in an Activity-Based