ABC systems seek an activity cost allocation driver that has a cause-and-effect relationship with costs in the cost pool.

Question

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ABC systems use a cause and effect relationship to allocate costs from activity cost pools to products or services. The allocation drivers reflect the activities that cause costs to accrue in the cost pool, and the drivers are chosen based on the extent to which they drive the cost of the particular activity.

ABC Systems Seek an Activity Cost Allocation Driver That Has