Question

Which of the following costing systems analyzes the activity accounting system and uses the most expensive activities for activity-based costing (ABC) assignment?

a. A normal costing system
b. Equally accurate reduced ABC systems
c. A transaction driven costing system
d. Approximately relevant ABC systems

Answer 1

The likely answer is 'Approximately relevant ABC systems,' which focuses on the most expensive activities in the calculation for activity-based costing, thus enabling more accurate cost allocation to products or services.

Step-by-step explanation:

The question is about identifying which of the following costing systems analyzes the activity accounting system and prioritizes the use of the most expensive activities for activity-based costing (ABC) assignment. The options presented can be a bit misleading, but the answer is most likely referring to Approximately relevant ABC systems, although the terminology used isn't standard. In activity-based costing, costs are assigned more accurately to products or services based on the activities that go into making them. By focusing on the most expensive activities, a company can refine its costing analysis to ensure that these significant costs are properly allocated to the products or services that incur them.