ECONOMICS

Detailed explanation-1: -Activity-based costing (ABC) is a costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each. Therefore, this model assigns more indirect costs (overhead) into direct costs compared to conventional costing.

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 costing method that assigns overhead and indirect costs to related products and services.

Detailed explanation-4: -Which of the following is true about activity-based costing? Explanation: ABC assumes that the resource-consuming activities that generate costs are activities and not outputs. ABC is appropriate for all types of cost accumulation systems, including both job order and process costing.

Detailed explanation-5: -Definition and Principles of Activity-Based Costing The basic principle of ABC is that the cost of any activity should be proportional to the resources used to perform that activity. ABC identifies the major activities in a business and assigns costs to those activities based on the resources consumed.