The allocation bases used in conventional costing systems are more likely to be cost drivers than those used in ABC systems.

Question

Quizplus · Accepted Answer

In Activity-Based Costing (ABC) systems, allocation bases (cost drivers) are chosen for their direct correlation to the activities causing the cost, making them more accurate in tracing costs to products or services than the broader, less specific allocation bases often used in conventional costing systems.

The Allocation Bases Used in Conventional Costing Systems Are More