Question

Under the ABC costing method,

a. departments are identified as activities.
b. activity rates are calculated by dividing the budgeted activity cost by the total activity-base usage.
c. the budgetary activity costs are assigned to products using factory overhead rates for each activity.
d. All of these choices are correct.

Answer 1

d. All of these choices are correct.

Step-by-step explanation:

Activity Based Costing system is the cost attribution to cost units (products) on the basis of benefits received from indirect activities, that is overheads that can not be allocated to a particular product or process.

So the process involves identifying activities driving the overheads. Determining the activity rates and assigning the costs using activity rate.

So, all the options given are applicable.