Activity-based costing uses multiple activity bases to assign overhead costs to units of production.

Name: Activity-based costing uses multiple activity bases to assign overhead costs to units of production.
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Question

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Activity-based costing assigns overhead costs to units of production by using multiple activity bases, such as setup hours, machine hours, or number of units produced. This allows for a more accurate allocation of overhead costs compared to traditional methods that may only use one activity base.

Activity-Based Costing Uses Multiple Activity Bases to Assign Overhead Costs