From an ABC perspective,what causes costs to be incurred?
A)Financial transactions.
B)The volume of units produced.
C)Debits and credits.
D)Management decisions.
E)Activities.

Question

Quizplus · Accepted Answer

According to Activity-Based Costing (ABC), costs are incurred as a result of various activities performed in the production or delivery process. The volume of units produced (B) may be a factor, but it is not the only determinant of costs. Financial transactions (A) and debits and credits (C) are accounting terms and do not directly cause costs to be incurred. Management decisions (D) may influence the level of activities and associated costs, but it is the activities themselves that directly drive costs in ABC.

From an ABC Perspective,what Causes Costs to Be Incurred