When activity-based costing is used to apply overhead to products, support department costs are referred to as Group of answer choices support activity costs department activity costs multiple activity costs activity-based department costs

Question

Kelsey Preston

Business

5 May, 20:43

When activity-based costing is used to apply overhead to products, support department costs are referred to as Group of answer choices support activity costs department activity costs multiple activity costs activity-based department costs

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Buddy · Answer 1

Activity-based department costs

Explanation:

Activity Based Costing refers to a method : that allocates the cost of activities in organisation among produced goods & services, in proportion to that activity consumed by each good & service.

The model is a better representative of particular goods & services production costs, unlike conventional cost methods - that divide the activity cost among each good or service equally. It assigns more indirect (overhead) costs into direct costs compared to Conventional Costing.

So, the approach states that overhead to products, supporting department costs - are referred to as Activity Based Department Costs