Activity-Based Costing Assigns Cost to Cost Objects by First Tracing

question 122

Multiple Choice

Activity-based costing assigns cost to cost objects by first tracing costs to

• A)products and then tracing costs to cost objects.
• B)departments and then tracing costs to products.
• C)activities and then tracing costs to cost objects.
• D)customers and then tracing costs to products.

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Definitions:

Scarce Resources

Resources that are limited in availability and cannot meet all demands of production or consumption at the same time.

Shadow Price

In economic theory, the value of an additional unit of a constrained resource, or the opportunity cost of not having that additional resource available.

Assembly Time

The total time required to put together various components of a product into its final form.

Overtime

Additional time worked by an employee beyond the normal or legally defined working hours, often eligible for higher pay rates.