Activity-based costing (ABC)focuses on the costs of activities when allocating indirect costs to products and services.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) is a cost allocation method that focuses on identifying activities and then assigning costs to those activities. It seeks to allocate indirect costs to products and services more accurately by tracing the activities that generate them. ABC is based on the principle that the costs of a product or service are related to the activities that drive those costs, rather than the volume of output. Hence, the answer is true.

Activity-Based Costing (ABC)focuses on the Costs of Activities When Allocating