A(n) _____ system first traces costs to activities and then to products.
A) direct costing
B) absorption costing
C) traditional-based costing
D) activity-based costing

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) systems trace costs to activities and then to products. It is a more accurate method of allocating costs compared to traditional-based costing or absorption costing. Direct costing is a method that only includes variable costs in the cost of a product, while absorption costing includes both variable and fixed costs.

A(n) _____ System First Traces Costs to Activities and Then