An implementation of activity based costing would be possible only if the accountants find ____________?
Correct answer: C. cost driver for each activity
- A. goodness of each activity
- B. handling of each activity
- C. cost driver for each activity
- D. cost object for each activity
Explanation
Activity-based costing assigns overhead by linking each activity to the factor that causes its cost. Therefore, a suitable cost driver must be identified for every activity.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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