Question

Which of the following statements best describes activity based costing?: Group of answer choices A. activity...

Which of the following statements best describes activity based costing?:

Group of answer choices

A. activity based costing focuses on assigning overhead costs

B. activity based costing can only be used by very large, international companies

C. activity based costing cannot be used in businesses that provide services to its customers

D. activity based costing must adhere to generally accepted accounting principles

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Answer #1

Solution:

Statment that best describes activity based costing is "activity based costing focuses on assigning overhead costs" because activity based costing is used to assigned indirect cost by identifying activity and their associated cost with respect to allocation base.

Further actvitiy based costing can be used by large and small organiztion and organization in service sector also. As it relates to managerial accounting, therefore it should not required to adhere generally accepted accounting principles.

Hence option A is correct.

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