________ is considered while choosing a cost allocation base for activity costs in ABC costing.
A) The marketing strategy of the products being produced
B) The product sales price
C) The availability of reliable data and metrics
D) The number of employees in direct labor

Question

Quizplus · Accepted Answer

The availability of reliable data and metrics is crucial in choosing an appropriate cost allocation base for activity costs in ABC costing. ABC costing relies heavily on accurate data to determine more precise costs for each activity, so the chosen cost allocation base must be measurable and relevant to the activity being performed. Factors such as marketing strategy, product sales price, and number of employees in direct labor are not necessarily relevant in choosing a cost allocation base for activity costs in ABC costing.

________ Is Considered While Choosing a Cost Allocation Base for Activity