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.
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.
