Question

Of the following, which is the best reason for using activity-based costing? a. to keep better track of overhead costs b. to assign indirect service overhead costs to direct overhead cost pools c. to more accurately assign overhead costs to cost pools so that these costs are better controlled d. to better assign overhead costs to products

Answer 1

d. to better assign overhead costs to products

Step-by-step explanation:

Activity-based costing is a method in which the overhead costs are assigned to the goods and this helps to create a relationship between the costs and the products to have a better understanding of the costs involved in the manufacturing process. According to this, the answer is that the best reason for using activity-based costing is to better assign overhead costs to products.