Which of the following statements is true of activity-based costing?
A)ABC ignores the allocation of storage costs.
B)An activity cost pool collects costs related to the same activity.
C)ABC is more likely to result in big differences from a traditional costing system if the business makes only one product rather than multiple products.
D)Activities are the cost objects of the second stage of ABC.
E)ABC uses a single overhead rate.

Question

Quizplus · Accepted Answer

An activity cost pool is a collection of costs related to the same activity, such as setting up a machine or inspecting a product. Other statements are incorrect.

Which of the Following Statements Is True of Activity-Based Costing