An activity-based costing system allocates factory overhead rates to products or
Services using

Question

Quizplus · Accepted Answer

Activity-based costing system assigns costs to activities and then to products or services based on their usage of those activities, using activity rate multiplied by the number of activity-based usage quantities. This method provides a more accurate and detailed understanding of costs than a single plantwide rate or budgeted revenue allocation, and it assigns costs throughout the year rather than waiting for an end-of-year allocation.

An Activity-Based Costing System Allocates Factory Overhead Rates to Products