The basic concept underlying the use of this analytical method is that costs are allocated to individual units on the basis of how the units actually expend or cause these costs.
A) activity-based costing
B) cost analysis
C) profitability analysis
D) hierarchical sales analysis
E) productivity analysis

Question

Quizplus · Accepted Answer

Activity-based costing is the method that assigns costs to individual units based on the specific activities that are required to produce them. This method is a more accurate way of determining the true cost of a product or service, as it takes into account all of the resources used and tasks performed in order to produce each unit.

The Basic Concept Underlying the Use of This Analytical Method