Which of the following is a reason for using activity-based costing to allocate service department costs?
A)It can lead to improved allocation of service department costs to production departments.
B)It is required by generally accepted accounting principles.
C)It is required by the tax authorities.
D)All of the answers are correct.

Question

Quizplus · Accepted Answer

Activity-based costing can improve the allocation of service department costs by identifying the specific activities that drive those costs and allocating them to the production departments that benefit from those activities. It is not required by GAAP or tax authorities, and D is not a correct answer as it includes incorrect information.

Which of the Following Is a Reason for Using Activity-Based