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

question 44

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

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Definitions:

Day-to-Day Operations

Refers to the regular, routine functions and activities that a business engages in to operate and produce its goods or services.

Managers

Individuals who are responsible for controlling and overseeing the operations within a section of an organization, often tasked with making crucial decisions.

Income Statement

A financial statement that shows a company's revenues, expenses, and profits over a specific period.

Inventory

Products or goods that a business holds for the purpose of sale or production in the course of business operations.