Activity-based costing for manufacturing operations is used to assign:
A)Direct material and direct labor costs to products.
B)Direct labor and manufacturing overhead costs to products.
C)Manufacturing overhead costs to products.
D)Selling and general administrative overhead costs to products.
E)Selling and general administrative overhead and manufacturing overhead costs to products.

Question

Quizplus · Accepted Answer

Activity-based costing for manufacturing operations is used to assign manufacturing overhead costs to products by identifying specific activities that consume resources and allocating the overhead costs based on the use of those activities by each product. Direct material and direct labor costs are assigned using traditional costing methods, and selling and general administrative overhead costs are not assigned to products but are instead treated as period expenses.

Activity-Based Costing for Manufacturing Operations Is Used to Assign