The Amount of Resources Used in an Activity-Based Costing (ABC)

question 48

Multiple Choice

The amount of resources used in an activity-based costing (ABC) system for a specific activity is computed by multiplying the:

• A) cost driver rate by the actual cost driver volume.
• B) cost driver rate by the planned cost driver volume.
• C) overhead rate by the actual cost driver volume.
• D) overhead rate by the planned cost driver volume.

---

Definitions:

Economic Resources

Assets or inputs used for the production of goods and services, typically categorized into land, labor, capital, and entrepreneurship.

Marginal Product

Marginal product is the additional output generated by using one more unit of a particular input while keeping other inputs constant.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource, all other factors being constant.

Resource Productivity

The ratio of output (goods and services) produced per unit of resource input, used to assess the efficiency of resource use.