Question

Activity based costing _____________
1. groups costs into meaningful buckets that are then distributed based on the activity or product they support.
2. is useful for allocating small project work.
3. charges all costs to "cost centers".
4. considers only initial capital investments.
5. calculates ongoing maintenance costs.

Answer 1

Answer:

1. groups costs into meaningful buckets that are then distributed based on the activity or product they support.

Explanation:

Activity based costing basically categorizes various overheads into different activities, that leads to charge of overheads based on different activities.

In this manner overheads that shall be charged on some standard products based on the activities involved is charged accordingly, and not based on standard overhead allocation rate.

Basically the overheads are divided into various activities and then distributed  to each product based on the volume of activity in the manufacturing process of such activity.