Activity-Based Costing Systems Generally Use Volume-Based Cost Drivers

question 102

True/False

Activity-based costing systems generally use volume-based cost drivers.

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Definitions:

Customer Cost Analysis

The process of analyzing the costs related to acquiring and serving a customer, often to determine profitability.

Processing Batches

Groups of items or materials processed together through a production or manufacturing procedure at the same time.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific products or services based on the actual consumption of resources.

Activity Rates

The cost driver rates used in activity-based costing to allocate expenses to products or services based on their consumption of activities.