When using an activity-based costing system,which of the following is the formula for allocating costs to products or services?
A)Activity rate x activity driver consumption
B)Activity rate x amount in activity pool
C)Predetermined manufacturing overhead rate x actual activity
D)None of these ans choices are correct.

Question

Quizplus · Accepted Answer

Activity-based costing allocates costs to products or services based on the consumption of activity drivers. The formula for allocating costs to products or services is activity rate x activity driver consumption. This means that the activity rate, which is the cost of the activity per unit of the activity driver, is multiplied by the amount of activity driver consumed by each product or service.

When Using an Activity-Based Costing System,which of the Following Is