Which of the following statements is correct regarding the activity-based costing system?
A)It uses separate indirect cost allocation rates for each activity.
B)It is not as accurate or precise as traditional costing systems.
C)It accumulates overhead costs by processing departments.
D)It is less complex and, therefore, less costly than traditional systems.

Question

Quizplus · Accepted Answer

Activity-based costing system uses separate indirect cost allocation rates for each activity, which makes it more accurate and precise than traditional costing systems. It does not accumulate overhead costs by processing departments, and it may be more complex and costly to implement in organizations.

Which of the Following Statements Is Correct Regarding the Activity-Based