Which of the following statements is most complete and correct?
A) Activity-based costing uses non-volume-based cost drivers only.
B) Activity-based costing uses volume-based cost drivers.
C) Activity-based costing recognises that both volume-based and non-volume-based cost drivers may be appropriate.
D) None of the given answers.

Question

Quizplus · Accepted Answer

Activity-based costing recognises that both volume-based and non-volume-based cost drivers may be appropriate. While volume-based cost drivers are commonly used in activity-based costing, non-volume-based cost drivers can also be used when they provide a better representation of the actual cost driver for a particular activity. Therefore, statement A is incorrect and statement B is only partially correct. Statement D is not a valid answer as all given answers are either partially correct or incorrect.

Which of the Following Statements Is Most Complete and Correct