The activity-based costing system
A)is the most appropriate method of cost accounting for rigid hierarchical organizations.
B)effectively departmentalizes an organization based on its core functions, such as human resources and maintenance.
C)provides a more accurate picture of how costs should be charged to products and services.
D)assumes that organizations are bureaucratic "machines" that can be separated into component functions.
E)fails to allocate costs across business processes and is less effective than traditional methods of cost accounting.

Question

Quizplus · Accepted Answer

The activity-based costing system provides a more accurate picture of how costs should be charged to products and services. It allocates costs based on the activities involved in producing those products or services, rather than just based on departmental or organizational structure. This can lead to more precise cost allocation and better decision-making.

The Activity-Based Costing System