What are three advantages of activity-based costing over traditional volume-based allocation methods?
A)Ease of use,more accurate product costing,and more effective cost control.
B)Fewer allocation bases,ease of use,and a direct correlation to production volume.
C)More accurate product costing,more effective cost control,and better focus on the relevant factors for decision making.
D)More accurate product costing,fewer cost objects,and a direct correlation to production volume.
E)More accurate product costing,ease of use,less costly to implement.

Question

Quizplus · Accepted Answer

Activity-based costing provides more accurate product costing, more effective cost control, and focuses on relevant factors for decision making, such as identifying which activities drive costs. This method allows a business to allocate overhead costs to specific activities and products based on their true usage of resources, rather than allocating costs based solely on volume. This results in a more accurate measure of a product's profitability and helps in making better cost management decisions.

What Are Three Advantages of Activity-Based Costing Over Traditional Volume-Based