Activity-Based Costing Uses Multiple Activity Bases to Assign Overhead Costs

question 99

True/False

Activity-based costing uses multiple activity bases to assign overhead costs to units of production.

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Definitions:

Activity-Based Costing

An accounting method that assigns costs to products and services based on the activities and resources that go into producing them.

Single Overhead Rate

A method in cost accounting where a single rate is used to allocate each unit of overhead to products or cost objects.

Direct Labor Hours

The total hours worked by employees directly involved in the production process or operation of a service.

Materials Input

The raw materials, components, and supplies used in the production or manufacturing of goods.