In activity-based costing, a product margin may exclude costs from some of the company's activity cost pools.

Question

Quizplus · Accepted Answer

Activity-based costing focuses on assigning costs to specific activities, and then assigning those costs to products based on the level of activity required to produce the product. Therefore, a product margin may exclude costs from some of the company's activity cost pools if those activities are not directly related to the production of that specific product.

In Activity-Based Costing, a Product Margin May Exclude Costs from Some