A costing system that first assigns costs to activities and then to products is
A) activity-based costing.
B) job-order costing.
C) activity-based management.
D) volume based costing.
E) nonunit-level costing.

Question

Quizplus · Accepted Answer

Activity-based costing first identifies the activities involved in producing a product or service and then assigns costs to those activities. The costs are then assigned to products based on the amount of each activity used in the production process. Job-order costing assigns costs to specific jobs or batches of products, whereas activity-based costing focuses on activities and their costs. Activity-based management is a process used to improve business processes by analyzing and managing activities. Volume-based costing focuses on the volume of production and allocates the cost based on a predetermined rate. Nonunit-level costing is a form of activity-based costing that identifies costs related to activities that are not tied to the production volume.

A Costing System That First Assigns Costs to Activities and Then