Which of the following statements is true of an activity-based costing system?
A)It uses separate indirect cost allocation rates for each activity.
B)It is not as accurate or precise as traditional costing systems.
C)It accumulates overhead costs by processing departments.
D)It is not as complex or as costly as traditional systems.

Question

Quizplus · Accepted Answer

An activity-based costing system uses separate indirect cost allocation rates for each activity, making it more accurate and precise than traditional costing systems that use a single overhead rate for the entire organization.

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