When designing an activity-based costing system, related activities are frequently combined to reduce the amount of detail and record-keeping cost.

Question

Quizplus · Accepted Answer

Combining related activities can reduce the amount of detail and record-keeping cost, which is one of the advantages of activity-based costing (ABC) systems. However, it is important to ensure that the combined activities are still meaningful for accurate cost allocation.

When Designing an Activity-Based Costing System, Related Activities Are Frequently