alleryStart learning →ABC assigns the cost of each activity to products according to what?
ATheir final selling price
BTheir direct labour hours alone
CAn equal share per product
DTheir actual use of the activity
Answer & Solution
Correct answer: D. Their actual use of the activity
ABC links each activity cost to a product by how much of that activity the product really consumes.
Keep practising Activity Based Costing
Browse all Activity Based Costing questions for CA Inter, or explore more Cost and Management Accounting topics.
Related questions
Setup pool Rs 60,000, 150 setups. Product A used 90 setups. A's share?ABC assigns Rs 36,000 overhead to 1,200 units. Overhead per unit?Service pool Rs 1,80,000 for 6,000 calls. A client making 40 calls bears?Overhead Rs 1,00,000 split by units: A 1,000, B 4,000. A's volume-based share?Setup pool Rs 1,00,000 for 100 setups. Product A: 1,000 units, 50 setups. Setup cost per uOverhead is Rs 8,000 conventionally and Rs 12,000 under ABC. The product isOverhead Rs 2,00,000 over 10,000 labour hours. Product using 400 hours gets?Setup Rs 60,000 (200 setups), machine Rs 40,000 (2,000 hrs). Batch of 50 units: 10 setups,