The costing system, in which individual activities are identified as the cost object, is considered as _________?
Correct answer: B. activity based costing
- A. manufactured costing
- B. activity based costing
- C. allocation costing
- D. base costing
Explanation
Activity-based costing treats activities as cost objects and assigns their costs to products or services according to the activities consumed. Traditional allocation costing generally relies more heavily on broad overhead bases.
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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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