Question

A costing method that first assigns costs to activities and then assigns them to products based on the products' consumption of those activities is:

a) full-absorption costing
b) activity - based costing
c) variable costing
d) benchmarking

Answer 1

Answer: Activity based cost accounting

Explanation:

The activity based cost accounting is the one of the type of accounting method in an organization that assigned various types of objects for allocating indirectly the overall cost of the products in the department as compared to the conventional costing.

 According to the given question, the activity based cost accounting is firstly assigning the cost to each activity and then assigning the products based in the consumption for different types of activities in production processing.

 Therefore, Activity based cost accounting is the correct answer.