Activity-based costing (ABC)is a technique for accumulating cost for a given cost object that represents the total and true economic resources required or consumed by the object.

Question

Quizplus · Accepted Answer

Activity-based costing is a technique that aims to accurately allocate costs to specific cost objects, based on the actual activities involved in producing or servicing them. The goal is to identify the true costs of a product or service, by tracing expenses to the specific activities that drive them, rather than allocating them based on a general overhead rate. This allows for a more accurate understanding of the costs of producing a given product, and can lead to better decision-making in terms of pricing, outsourcing, process improvement, and resource allocation. Thus, option A is correct.

Activity-Based Costing (ABC)is a Technique for Accumulating Cost for a Given