Activity-based cost accounting aims at
A) making cross-company comparisons of the costs of each value chain activity.
B) dividing all company expenses into two categories: activities whose costs are variable and activities whose costs are fixed.
C) determining the costs of each activity comprising a company's value chain by establishing expense categories for specific value chain activities and assigning costs to the activity responsible for creating the cost.
D) determining the costs of each strategic action a company initiates.
E) None of these accurately describes what activity-based costing is about.

Question

Quizplus · Accepted Answer

Activity-based cost accounting involves identifying and analyzing the costs of each activity in a company's value chain and assigning those costs to the activity responsible for creating the cost. This approach enables more accurate cost allocation and can help identify areas for cost reduction or process improvement. Options A, B, D, and E do not accurately describe activity-based cost accounting.

Activity-Based Cost Accounting Aims at