Activity-based costing
A) strives to create an environment that will enable workers to manufacture zero-defect products.
B) is the process of choosing among competing alternatives.
C) was established in response to financial scandals.
D) encourages process-value analysis.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) is a costing method that identifies activities in an organization and assigns the cost of each activity to products and services according to the actual consumption of each activity. It encourages process-value analysis, which is the examination of every step in a manufacturing process to identify areas where cost savings can be achieved without sacrificing quality.

Activity-Based Costing