Activity Based Costing Allocates Indirect Costs to Fixed Costs Based

question 32

Multiple Choice

Activity based costing allocates indirect costs to fixed costs based on different types of cost drivers.Which of the following is one of the cost drivers that serve as a basis of cost allocation?

• A) number of units produced
• B) number of labor hours
• C) quantity of materials used
• D) direct equipment costs

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Definitions:

Staircase Analysis

A method for evaluating the progressive steps or stages in a process, such as customer conversion or product development, to identify improvements.

Brand Awareness

The extent to which consumers are familiar with the qualities or image of a particular brand of goods or services.

Market Share

The part of a market that is under the influence of a distinct company or product.

Repeat Customers

Individuals or entities that make purchases from a business on more than one occasion over a period of time.