Question

Activity-based costing provides: Multiple Choice More detailed measures of costs than do plantwide or department allocation...

Activity-based costing provides:

Multiple Choice

  • More detailed measures of costs than do plantwide or department allocation methods.

  • Less detailed measures of costs than do plantwide allocations but more than department allocation methods.

  • More detailed measures of costs than do plantwide allocations but less than department allocation methods.

  • Less detailed measures of costs than do plantwide or department allocation methods

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Answer #1

The correct answer is

More detailed measures of costs than do plantwide or department allocation methods.

Explanation

Activity based costing refers to the costing techniques in which the costs are allocated based on the number of activity used by the product. where as plant wide allocation method uses the single rate and department allocation method uses the department rate which are not as detailed as Activity based costing allocation method, as it is based and calculated based on each activity process used. So the correct answer is

More detailed measures of costs than do plantwide or department allocation methods.

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