Activity-based costing:

a. is an accounting system that assigns a company's expenses to whichever activity in a company's value chain is responsible for creating the cost

b. involves using benchmarking techniques to develop cost estimates for the value chain activities of each major rival

c. is a powerful tool for identifying the different pieces of a company's value chain and classifying them as primary activities and support activities

d. involves determining which value chain activities represent variable costs and which represent fixed costs

e. is a tool for identifying the activities that cause a company's product to be strongly differentiated from the products of rivals

Question

Business

Cayden Perkins

22 December, 10:30

Activity-based costing:

a. is an accounting system that assigns a company's expenses to whichever activity in a company's value chain is responsible for creating the cost

b. involves using benchmarking techniques to develop cost estimates for the value chain activities of each major rival

c. is a powerful tool for identifying the different pieces of a company's value chain and classifying them as primary activities and support activities

d. involves determining which value chain activities represent variable costs and which represent fixed costs

e. is a tool for identifying the activities that cause a company's product to be strongly differentiated from the products of rivals

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Answers (1)

Know the Answer?

Luz Underwood · Answer 1

a. is an accounting system that assigns a company's expenses to whichever activity in a company's value chain is responsible for creating the cost

Explanation:

Activity-based costing is a system that allocates costs to the activities that cause them and then, the costs of those activities are added to the products that use them. According to this, the sentence that is appropiate to explain activitiy-based costing is A.