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1. Which is not task usually associated with activity-based costing (ABC)?
a. Applying an activity rate for each cost pool
b. Applying a single cost rate across processed
c. Identifying specific cost drivers
d. Appropriately allocating overhead costs to cost pools

Respuesta :

The correct option is C. Identifying specific cost drivers is not a task usually associated with activity-based costing (ABC). Since heterogeneous products are distinct from other products, process costing does not apply to them.

Which is a task usually associated with activity-based costing ABC?

Tracing direct labor expenses back to product and customer contracts and allocating manufacturing overheads based on current direct labor hours to contracts were the two key responsibilities of the ABC system.

The advantage of the activity-based costing approach is not the reduction of prime cost. Reason: In an activity-based cost system, the products and manufacturing inputs are given a special cost measure. The ABC system employs a system that more precisely allocates expenses to items.

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