B is corrent because activity-based costing (ABC) is based upon two principles. First, activities consume resources. Second, these resources are consumed by products, services, or other cost objectives (output). ABC allocates overhead costs to products on the basis of the resources consumed by each activity involved in the design, production, and distribution of a particular good.
A is incorrect because activity-based costing (ABC) is based upon two principles. First, activities consume resources. Second, these resources are consumed by products, services, or other cost objectives (output).
C is incorrect because activity-based costing (ABC) is based upon two principles. First, activities consume resources. Second, these resources are consumed by products, services, or other cost objectives (output).
D is incorrect because activity-based costing (ABC) is based upon two principles. First, activities consume resources. Second, these resources are consumed by products, services, or other cost objectives (output).
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