alleryStart learning →Activity-based costing assigns overhead to products based on the various:
AActivities that drive costs
BAuditors that review costs
CInvestors that supply funds
DCustomers that place orders
Answer & Solution
Correct answer: A. Activities that drive costs
1. Overhead has to be attached to products by some rule.
2. Activity-based costing is the process that assigns overhead to products.
3. It does so based on the various activities that drive overhead costs.
4. The activities, not the auditors or investors, decide the split.
_Source: OpenStax Principles of Accounting Volume 2, Managerial Accounting (CC BY-NC-SA 4.0), Ch 6 'Activity-Based, Variable, and Absorption Costing', sections 6.1-6.5_
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Related questions
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