Using non-volume-based activity drivers allows activity-based costing to:
A)assign more indirect costs to products whose production volume is higher.
B)assign more direct costs to products whose production volume is higher.
C)assign more indirect costs to products whose complexity is higher.
D)assign more direct costs to products whose complexity is higher.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) assigns costs to products based on the activities required to produce them, rather than on volume alone. This means that products requiring more complex or numerous activities will be allocated more indirect costs, reflecting their greater consumption of resources.

Using Non-Volume-Based Activity Drivers Allows Activity-Based Costing To