Under activity-based costing, non manufacturing costs may be allocated to products based on cause
For better understanding, lets explain the term
- Activity based costing is commonly described as an overhead cost-allocation system that shares overhead to different activity cost pools and gives each of the activity cost pools to products or services through of cost drivers that shows the activities used.
- It is usually based on the cause or motives under activity based costing is manufacturing cost allocation. That is the cause of its use.
From the above. we can say the answer Under activity-based costing, non manufacturing costs may be allocated to products based on cause is correct
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