Question

Activity-based costing (ABC) can eliminate cost distortions because ABC systems ________.A) establish a cause-and-effect relationship with the activities performedB) use single cost pool for all overhead costs, thereby enabling simplicityC) use a broad average to allocate all overhead costsD) never consider interactions between different departments in assigning support costs

Answer 1

A) establish a cause-and-effect relationship with the activities performed

Step-by-step explanation:

Activity-based costing (ABC) can eliminate cost distortions because ABC systems establish a cause-and-effect relationship with the activities performed.