If a Business Wants to Use Time-Driven Activity-Based Costing (TDABC)

Multiple Choice

If a business wants to use Time-Driven Activity-Based Costing (TDABC) , then they will need to calculate the cost per transaction after determining their rate for supplying an activity. Which of the following represents the correct formula for calculating the cost per transaction?

A) Cost per minute for supplying an activity (under TDABC) - Number of minutes per transaction
B) Cost per minute for supplying an activity (under TDABC) / Number of minutes per transaction
C) Cost per minute for supplying an activity (under TDABC) + Number of minutes per transaction
D) Cost per minute for supplying an activity (under TDABC) × Number of minutes per transaction