Activity-based costing _____________
A) groups costs into meaningful buckets that are then distributed based on the activity or product they support.
B) is useful for allocating small project work.
C) charges all costs to "cost centers."
D) considers only initial capital investments.
E) calculates ongoing maintenance costs.

Question

Quizplus · Accepted Answer

Activity-based costing is a method of allocating costs based on the activities that drive those costs. This allows for a more accurate allocation of costs to specific products or services, rather than simply charging all costs to general "cost centers." It does not only consider initial capital investments or ongoing maintenance costs. It is useful for allocating both small and large project work.

Activity-Based Costing _____________