Activity-Based Costing (ABC) is a method: That is recognized by the SEC as a legitimate and acceptable costing method to report Cost of Goods financial statements That recognizes that many organizational resources are required not for the direct physical production of units of a product but to provide a range of support activities Where all activities are allocated to a product line based on the direct labor hours expended on it That recognizes that organizational resources are fixed costs and, therefore, irrelevant to determining a product's true costs. Where activities refer to those focused on the direct manufacture of a product