Question

Regarding ABC costing systems, which of the following statements is true?ABC systems accumulate overhead costs by departmentsABC costing systems are less complex and therefore less costly than traditional systemsABC costing systems have separate indirect cost allocation rates for each activityABC costing systems can be used in manufacturing firms only

Answer 1

Answer: ABC costing systems have separate indirect cost allocation rates for each activity

Explanation: this costing method is based on the costs that each activity consume in a company. It can be used in either manufacturing or services company. The way of distribution the indirect costs is quite accurate.