The main difference between activity-based costing and traditional costing systems is that activity-based
costing uses a separate allocation rate for each activity.

Question

Quizplus · Accepted Answer

Activity-based costing allocates costs based on the specific activities that consume resources, and assigns a separate allocation rate for each activity. Traditional costing, on the other hand, uses a single allocation rate to allocate costs across all products or services.

The Main Difference Between Activity-Based Costing and Traditional Costing Systems