COST ACCOUNTING
ACTIVITY BASED COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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direct materials and manufacturing overhead.
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direct labor and manufacturing overhead.
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direct materials, direct labor, and manufacturing overhead.
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direct materials and direct labor.
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Detailed explanation-1: -In activity-based costing unit product costs computed for external financial reports include direct materials, direct labor, and manufacturing overhead.
Detailed explanation-2: -Activity-based costing (ABC) is a method of assigning overhead and indirect costs-such as salaries and utilities-to products and services. The ABC system of cost accounting is based on activities, which are considered any event, unit of work, or task with a specific goal.
Detailed explanation-3: -Activity-based costing (ABC) is a method to determine the total cost of manufacturing a product, including overhead. It is calculated by taking the cost pool total and dividing it by the cost driver.
Detailed explanation-4: -ActivityYBased Costing (ABC) is a system that is a cost calculation approach that focuses on activity as a fundamental cost object. The ABC system uses the cost of such activities as a basis for allocating costs to other cost objects such as products, services or customers.