Question

Activity-based costing accumulates overhead in one cost pool, then:_____.a. assigns the overhead to products and services by means of a cost driver. b. assigns activity cost pools to products and services, then allocates overhead back to the activity cost pools. c. allocates overhead to activity cost pools, and it then assigns the activity cost pools to products and services by means of cost drivers. d. allocates overhead directly to products and services based on activity levels.

Answer 1

Answer:

c. allocates overhead to activity cost pools, and it then assigns the activity cost pools to products and services by means of cost drivers.

Explanation:

The activity based costing is the costing that helps to allocated the indirect cost or we can say the manufacturing overhead cost with the help of the many cost drivers  or the many activity cost pools

Like if we allocate the setup cost so we have to allocated with the number of machine setups.

For the inspection cost, the number of inspections is required so that the allocation could be done