Multiple Choice QuestionABC can be used by service providers who usually classify costs byMultiple choice question.departmentactivity levelproduct
Question
Multiple Choice QuestionABC can be used by service providers who usually classify costs byMultiple choice question.departmentactivity levelproduct
Solution
The correct answer is "activity level". Activity-Based Costing (ABC) is a method of assigning overhead and indirect costs—such as salaries and utilities—to products and services. The ABC system of cost accounting is based on activities, which is any event, unit of work, or task with a specific goal, such as setting up machines for production, designing products, distributing finished goods, or operating machines. ABC, unlike traditional methods, assigns costs in a more logical manner by associating the cost with the actual activity that drives the cost.
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