In firms using activity-based costing (ABC), budgeted total factory overhead varies with changes in:
A) A single cost driver for applying overhead.
B) Several cost drivers.
C) The selected denominator activity level.
D) The quantity of input resources used in operations of the period.
E) Only batch-level cost drivers.

Question

Quizplus · Accepted Answer

In activity-based costing, overhead costs are allocated based on multiple cost drivers that reflect the various activities causing overhead costs, rather than a single cost driver.

In Firms Using Activity-Based Costing (ABC), Budgeted Total Factory Overhead