Question

Activity based costing ________________ a. groups costs into meaningful buckets that are then distributed based on the activity or product they support b. is useful for allocating small project work c. charges all costs to "cost centers" d. considers only initial capital investments e. calculates ongoing maintenance costs

Answer 1

Answer: Activity based costing "a. groups costs into meaningful buckets that are then distributed based on the activity or product they support.".

Explanation: This system is based on the fact that the products consume activities and the activities resources (costs). Thus, if you have information on what each activity costs and what activities are necessary for the generation of each product, then you can know how much each product costs from the activities that constitute it.