A cost management system that provides a structured way of thinking about the relationship between activities and the resources they consume is known as:
A)activity-based costing
B)volume-based costing
C)product-based costing
D)yield-based costing
E)margin-based costing

Question

Quizplus · Accepted Answer

Activity-based costing is a cost management system that helps to identify the activities that drive costs and the resources consumed by each activity, which helps in better management of costs. It provides a structured way of thinking about the relationship between activities and resources. Volume-based costing and product-based costing do not focus on understanding the relationship between activities and resources. Yield-based costing and margin-based costing are not commonly used cost management systems.

A Cost Management System That Provides a Structured Way of Thinking