How are overhead costs accumulated in an activity-based costing system?
A)in a single,plant-wide pool.
B)by departments.
C)in pools established by identified cost drivers.
D)in facility-level activities.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) accumulates overhead costs in pools established by identified cost drivers. This allows for a more accurate allocation of costs to specific activities or products than a traditional, plant-wide approach. Departmental and facility-level activities may also be included in ABC, but they would still be allocated based on the identified cost drivers in each pool.

How Are Overhead Costs Accumulated in an Activity-Based Costing System