CPA Canada Core 2 Practice Questions - CPA PEP Core 2 Management Accounting, Planning And Control Exam

Under activity-based costing (ABC), overhead is assigned to products primarily based on:

The relative sales revenue of each product line Direct material cost as the sole allocation base A single plant-wide rate using direct labour hours Cost drivers that capture the activities consumed by each product

Correct Answer:

Cost drivers that capture the activities consumed by each product

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