Using an activity-based costing system (ABC) enables a firm to calculate overhead variances for:
A) Sales volume and production volume.
B) Spending and selling price.
C) Each activity-based cost driver.
D) Semi-variable overhead costs.
E) Semi-fixed overhead costs.

Question

Quizplus · Accepted Answer

Activity-based costing system helps in identifying accurate cost drivers for each activity which leads to calculation of overhead variances for each activity-based cost driver. This helps in better cost control and decision-making.

Using an Activity-Based Costing System (ABC) Enables a Firm to Calculate