Which costing method targets specific activities as the main cost object?

Multiple choice question for Direct Cost Variances and Management Control. Select an option, then review the explanation below.

Explanation

Activity-based costing (ABC) is a system that assigns costs to individual activities, treating them as the primary cost objects. This differs from other methods like enhanced costing or general efficiency improvements, which do not specifically focus on activities.

Practice related questions from the same subject.

1.Within the hierarchy of costing and budgeting, which of the following represents a product sustaining cost?
2.Given that the actual cost of a material is $700 while the planned cost was $900, what type of variance is observed?
3.Given that the actual outcome is $65,000 and the static budget variance amounts to $35,000, what is the value of the static budget?
4.What term is used to describe the anticipated performance of a company?
5.Given that the actual labor cost is $1200 while the planned labor cost is $1000, what is the nature of the labor price variance?

Which costing method targets specific activities as the main cost object?

Explanation

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