Which statement is FALSE in regards to the treatment of direct material costs under an activity-based costing system? g

Direct material costs are not included in the product cost under an ABC system.

Explanation:

In the activity-based costing system, indirect costs are assigned to some products so that a true reflection of the cost of making a product is revealed as some indirect costs do in fact contribute to production.

The inclusion of Direct costs in the calculation of production cost however, are not denied here. Direct costs are included as a product cost as they are the main costs of the product.

It is therefore false that direct material costs are not included in the product cost under an ABC system.

answer; charters;