(CMA adapted)An accounting system that collects financial and operating data on the basis of the underlying nature and extent of cost drivers is

Question

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Activity-based costing (ABC) is an accounting system that identifies and collects financial and operating data based on the specific activities that create costs. It analyzes the underlying nature and extent of cost drivers, assigning costs to specific products, services, or activities. Full absorption costing and variable costing are other methods of costing, but they do not collect data based on cost drivers. Benchmarking is a process of comparing performance metrics with industry standards and best practices, which is different from accounting systems that collect data on cost drivers.

(CMA Adapted)An Accounting System That Collects Financial and Operating Data