Use of activity-based costing will result in the development of
A) one overhead rate based on direct labor hours.
B) one plantwide activity-based overhead rate.
C) multiple activity-based overhead rates.
D) no overhead rates; overhead rates are not used in activity-based costing.

Question

Quizplus · Accepted Answer

Activity-based costing involves assigning overhead costs to specific activities and then allocating those costs to products or services based on the amount of each activity consumed by the product or service. This requires the use of multiple activity-based overhead rates to accurately capture the costs of each individual activity.

Use of Activity-Based Costing Will Result in the Development of