Which of the following statements is TRUE?
A)A vital attribute of an ABC database is the cost of individual departments.
B)The ultimate objective of activity classification is to build homogeneous cost pools.
C)When unbundling general ledger costs to an ABC database, we are more concerned about "How are the dollars spent?" than "What is spent?"
D)Both b and c are true.

Question

Quizplus · Accepted Answer

B) The ultimate objective of activity classification in Activity-Based Costing (ABC) is indeed to create homogeneous cost pools, which allows for more accurate allocation of costs to products or services based on the activities that generate those costs. C) When unbundling general ledger costs into an ABC database, the focus is on understanding how resources are consumed by activities (the process or actions that incur costs) rather than just categorizing costs by type or what is spent. This approach helps in identifying the true drivers of costs and enables more precise cost management and decision-making.

Which of the Following Statements Is TRUE