Activity-based costing (ABC) differs from other costing approaches in that it more accurately measures the cost of activities:
A)Not proportional to the volume of outputs produced.
B)Directly proportional to the volume of outputs produced.
C)Inversely proportional to the volume of outputs produced.
D)That are non-value adding.
E)At a significantly lower cost in time and money.

Question

Quizplus · Accepted Answer

Activity-based costing is designed to accurately measure the cost of activities that are not proportional to the volume of outputs produced. This means that it takes into account the fact that some activities may require more resources or time, regardless of the number of units produced. ABC is able to allocate costs more accurately by identifying and tracking the specific activities that contribute to the production of a product or service, which can lead to better decision-making and cost control.

Activity-Based Costing (ABC) Differs from Other Costing Approaches in That