Compared to a traditional two-stage cost allocation system,activity-based costing systems:
A) Use fewer cost centers.
B) Use more cost drivers.
C) Are less expensive to maintain.
D) All of these answers are correct.

Question

Quizplus · Accepted Answer

Activity-based costing systems use more cost drivers compared to traditional two-stage cost allocation system. This is because activity-based costing systems allocate costs based on activities performed, which require more cost drivers to capture the resources used for each activity.

Compared to a Traditional Two-Stage Cost Allocation System,activity-Based Costing Systems