Create an accounting(math) question to be answered by a classmate, also create a discussion question based on the information below.

Activity-based costing is a way to measure how much overhead costs are being used in one particular area. "For companies with only one product...a single overhead rate is adequate" but for companies with multiple products or just a few products with vastly different production needs an activity-based costing system is preferable (Wild, 2019). Activity-based costing breaks the single overhead rate down into their various components and assigns them to each product as they are actually used, not just as a fraction of the total overall cost. Companies such as manufacturing can use activity-based costing systems to see how much of their overhead is being spent on a particular step or component and more see if they are using too much overhead on one product as compared to the price that it is being sold at.

A cost driver is something additional outside of actual production that either increases or decreases the price of the product. For example, if the plant manager spends a lot of time preparing invoices for a product or calling buyers of a product those cost drivers increase the price of the product by way of labor hours used, despite the fact that those hours are not being used directly in manufacturing the product.