A key difference between using multiple production department rates and activity-based costing is
A)the multiple production department rate method is used to distribute overhead costs to production activities and activity-based costing is used to distribute overhead costs to production departments
B)the multiple production department rate method is used to distribute overhead costs to production departments and activity-based costing is used to distribute overhead costs to production activities
C)the multiple production department rate method is used to distribute general and administrative costs to production departments and activity-based costing is used to distribute overhead costs to production activities
D)the multiple production department rate method is used to distribute general and administrative costs to production departments and activity-based costing is used to distribute general and administrative costs to production activities

Question

Quizplus · Accepted Answer

The multiple production department rate method allocates overhead costs to different production departments based on department-specific rates, while activity-based costing (ABC) allocates overhead costs to specific activities that drive costs, aiming for more accurate product costing by tracing costs more directly to the activities that cause them.

A Key Difference Between Using Multiple Production Department Rates and Activity-Based