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Which of the following statements is most complete and correct?

a. Activity-based costing uses non-volume-based cost drivers only.
b. Activity-based costing uses volume-based cost drivers.
c. Activity-based costing recognises that both volume-based and non-volume-based cost drivers may be appropriate.
d. None of the given answers.



Answer :


c. Activity-based costing recognizes that both volume-based and non-volume-based cost drivers may be appropriate.

This statement accurately reflects the nature of activity-based costing, which assigns overhead costs to products or services based on the activities involved in producing them, using both volume-based and non-volume-based cost drivers.

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