The accounting system used to assess the specific cost components of producing a product or service is known as
A) economic value added.
B) return on equity.
C) activity-based costing.
D) economies of scale.

Question

Quizplus · Accepted Answer

Activity-based costing is the accounting system used to assess the specific cost components of producing a product or service. It identifies the activities involved in producing the product or service and assigns the cost of each activity to the product or service based on its consumption of those activities. This method provides a more accurate understanding of the cost drivers of production and can help in improving efficiency and profitability. Economic value added, return on equity, and economies of scale are financial performance measures that do not specifically relate to the cost components of production.

The Accounting System Used to Assess the Specific Cost Components