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)activity-based costing.
C)value engineering.
D)prevention costs.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) is 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. This approach provides a more accurate way to allocate overhead costs and to calculate the cost of goods and services compared to traditional costing methods. Options A, C, and D refer to other quality management techniques and are not related to activity-based costing.

A System That Focuses on Activities as the Fundamental Cost