alleryStart learning →How does activity-based costing assign the cost of each activity?
ABy actual usage
BBy equal shares
CBy sales value
DBy labour cost only
Answer & Solution
Correct answer: A. By actual usage
ABC charges products with an activity's cost in line with how much of that activity each uses.
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Related questions
In the CIMA description of ABC, activities are assigned to what?In which journal did Cooper and Kaplan publish ABC articles from 1988?Drucker said ABC also records the cost of what?What limits the use of ABC, especially in services?What is a danger of ABC, like other cost allocation approaches?The chief executive's salary stays unassigned in ABC. What are such costs termed?Why did indirect costs rise relative to direct costs in modern factories?How does ABC assign costs, rather than using broad arbitrary percentages?