In activity-based costing, the three informational components to the company are:
A) Channels, products, and vendors
B) Customers, channels, and costs
C) Resources, activities, and cost objects
D) Drivers, products, and customers
E) Products, products, and products

Question

Quizplus · Accepted Answer

Activity-based costing focuses on identifying the resources (such as labor, materials, etc.), the activities (such as setup, inspection, etc.), and the cost objects (such as products, customers, etc.) involved in producing a product or service. Therefore, the three informational components in activity-based costing are resources, activities, and cost objects. Choices A, B, D, and E either do not accurately reflect the components of activity-based costing or do not provide a complete picture of the company's operations.

In Activity-Based Costing, the Three Informational Components to the Company