Which of the following statements is true of activity-based costing (ABC)?
A) It determines the absolute cost per unit of production.
B) It is more complex than the direct labor method.
C) It involves a five-stage process.
D) It assigns costs based on the "one size fits all" rule.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) is more complex than the direct labor method because it involves identifying multiple cost drivers and allocating costs based on activities rather than a single factor like direct labor hours.

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