Activity-Based Costing

question 30

Multiple Choice

Activity-based costing

• A) allocates overhead to activity cost pools, and it then assigns the activity cost pools to products and services by means of cost drivers.
• B) accumulates overhead in one cost pool, then assigns the overhead to products and services by means of a cost driver.
• C) assigns activity cost pools to products and services, then allocates overhead back to the activity cost pools.
• D) allocates overhead directly to products and services based on activity levels.

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Definitions:

Banks

Financial institutions licensed to receive deposits and provide loans to individuals and businesses.

Product Layout

The arrangement of equipment, workstations, and services in a production facility to streamline operations and workflow.

Customer-Oriented

A business approach focusing on creating a positive experience for customers through service and product satisfaction.

Hospital Rooms

Individual or shared living spaces within a hospital where patients receive medical care and treatment.