Which of the following does activity-based costing consider to be the fundamental cost object?
A)Direct labor hours
B)Activities
C)Direct materials
D)Finished goods

Question

Quizplus · Accepted Answer

Activity-based costing considers activities as the fundamental cost object. This means that costs are traced to the activities that cause them, rather than simply allocating them based on a traditional cost driver such as direct labor hours or direct materials. By focusing on activities as the cost objects, activity-based costing provides a more accurate picture of the true cost of producing goods or services.

Which of the Following Does Activity-Based Costing Consider to Be