An overhead allocation method that collects costs by cost driver categories and attaches those costs to products using multiple cost drivers is called
A) budgeting.
B) activity-based management.
C) strategic management.
D) value-added accounting.
E) activity-based costing.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) is the overhead allocation method that collects costs by cost driver categories and attaches those costs to products using multiple cost drivers. This method aims to provide more accurate cost information by assigning overhead costs based on the activities that generate costs instead of using a single, volume-based cost driver.

An Overhead Allocation Method That Collects Costs by Cost Driver