A system that focuses on activities as the fundamental cost object and uses the costs for these activities to compile indirect costs of goods and services is
A)appraisal costs.
B)value engineering.
C)activity-based costing.
D)prevention costs.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) system focuses on activities as the fundamental cost object and uses the costs for these activities to compile indirect costs of goods and services. ABC provides a more accurate and detailed understanding of the costs involved in producing a product or providing a service, which can help in making better business decisions. Appraisal costs, value engineering, and prevention costs are all different techniques for cost management but do not involve activities as the fundamental cost object in the same way as ABC.

A System That Focuses on Activities as the Fundamental Cost