Accounting · Cost Accounting
Which of the following statements about Activity-Based Costing (ABC) is true?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The cost driver for quality inspection is always determined strictly by the total batch size.
- 2The cost driver for materials handling and dispatch costs is typically the number of orders handled.✓
- 3In the short run, all overhead costs for an activity vary directly with the amount of the cost driver.
- 4A cost driver is defined as an activity-based cost pool.
Correct answer
The cost driver for materials handling and dispatch costs is typically the number of orders handled.
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