When determining customer profitability, activity-based costing can be used to analyze:
A) orders processed.
B) sales visits.
C) special packaging and handling.
D) billing and collections.
E) All of the answers are correct.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) is a method that assigns costs to products and services based on the activities they require. This includes orders processed, sales visits, special packaging and handling, and billing and collections. Each of these activities consumes resources and thus incurs costs that can be allocated to customers to determine their profitability.

When Determining Customer Profitability, Activity-Based Costing Can Be Used to Analyze