Which one of the following describes an activity base?

Question

Quizplus · Accepted Answer

An activity base is a measure that has a correlation with assigning overhead, as it serves as the basis for allocating overhead costs to cost objects. It could be a volume-based measure like direct labor hours, machine hours, units produced, etc., or a non-volume-based measure like the number of production setups, inspection hours, etc. The choice options A, B, and D suggest a subjective or arbitrary approach to allocating overhead, which is not based on any objective measure of activity.

Which One of the Following Describes an Activity Base