Final answer:
The use of activities having a cause-and-effect relationship is the most representative statement of activity-based costing in comparison to a department-costing system.
Step-by-step explanation:
The statement that is most representative of activity-based costing in comparison to a department-costing system is c. The use of activities having a cause-and-effect relationship. Activity-based costing (ABC) is a costing method that assigns costs to specific activities based on their actual consumption of resources, and then allocates those costs to products or services based on the activities they require.
ABC focuses on identifying the activities that drive costs rather than simply allocating costs to departments. By linking costs to specific activities and their causes, ABC provides a more accurate and detailed understanding of how different products or services consume resources.
For example, in a manufacturing company, ABC could identify activities such as machine setups, material handling, and quality inspections. Each activity will have its own cost associated with it, and products that require more of these activities will bear a higher proportion of the total costs.