Which of the following statement accurately describes activity-based costing (ABC)?
A)ABC considers the entire plant to be one cost pool.
B)ABC uses a separate cost pool for each department.
C)ABC uses a cost pool for each activity center.
D)ABC uses a cost pool for each industry.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) uses a cost pool for each activity center, rather than grouping all costs into one pool or using separate pools for each department or industry. This allows for more accurate allocation of costs to products or services based on the specific activities required to produce them.

Which of the Following Statement Accurately Describes Activity-Based Costing (ABC)