Which of the following measures is used by activity-based costing (ABC)systems as an allocation base for allocating overhead costs to the units produced?
A)Volume-related activities.
B)Batch-related activities.
C)Product-related activities.
D)Facility-related activities.
E)All of these are used by ABC systems.

Question

Quizplus · Accepted Answer

Activity-based costing systems use all of these measures as allocation bases for allocating overhead costs to the units produced. Volume-related activities are used to allocate overhead costs for activities such as machine setups, material handling, and quality control. Batch-related activities are used to allocate overhead costs for activities such as production scheduling and sales order processing. Product-related activities are used to allocate overhead costs for activities such as product design and engineering. Facility-related activities are used to allocate overhead costs for activities such as building maintenance and utilities.

Which of the Following Measures Is Used by Activity-Based Costing