Which of the following statements is true of activity-based costing?
A) ABC ignores the allocation of marketing costs.
B) ABC classifies some indirect costs as direct costs.
C) ABC is more likely to result in big differences from a traditional costing system if the business makes only one product rather than multiple products.
D) Activities are the cost objects of the second stage of ABC.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) can classify some indirect costs as direct costs by tracing them to specific activities, which are then assigned to products based on their usage of these activities.

Which of the Following Statements Is True of Activity-Based Costing