What is the validity of the following statements? (1) Activity-based costing sees overheads as rendering a service to cost units. (2) Activity-based costing views direct labor hour... What is the validity of the following statements? (1) Activity-based costing sees overheads as rendering a service to cost units. (2) Activity-based costing views direct labor hours as the most important cost driver.
Understand the Problem
The question is asking for the validity of two statements related to activity-based costing. The user needs to determine whether each statement is true or false.
Answer
B. Both (1) and (2) are false.
The final answer is B. Both (1) and (2) are false.
Answer for screen readers
The final answer is B. Both (1) and (2) are false.
More Information
Activity-based costing assigns costs using appropriate cost drivers related to specific activities rather than merely using direct labor hours.
Tips
Avoid assuming that traditional cost drivers like direct labor are the main drivers in ABC; focus on diverse activity-specific drivers.
Sources
- What is the validity of the following... - Course Hero - coursehero.com
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