The correct answer is A. activity based costing.
Activity-based costing (ABC) is a costing methodology that identifies and assigns indirect costs to cost objects based on the activities that drive those costs. ABC is a more accurate way to allocate indirect costs than traditional costing methods, such as absorption costing.
ABC is based on the following principles:
- Costs are caused by activities.
- Activities consume resources.
- Resources are consumed by cost objects.
ABC can be used to improve product costing, profitability analysis, and decision making.
Margin-based costing is a costing methodology that focuses on the contribution margin of products or services. Contribution margin is the difference between sales revenue and variable costs. Margin-based costing is often used in companies with a high proportion of variable costs.
Goodness of costing is a measure of the accuracy of a costing system. A costing system is considered to be good if it accurately reflects the costs of products or services.
Handling-based costing is a costing methodology that focuses on the costs of handling materials and products. Handling costs include the costs of moving materials and products, storing materials and products, and inspecting materials and products.
In conclusion, the correct answer is A. activity based costing.