An Activity-Based Costing System That Is Designed for Internal Decision-Making

question 35

Multiple Choice

An activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles because:

• A) under activity-based costing some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining costs) will not be assigned to products.
• B) under activity-based costing the sum of all product costs does not equal the total costs of the company.
• C) activity-based costing has not been approved by the United Nation's International Accounting Board.
• D) activity-based costing results in less accurate costs than more traditional costing methods based on direct labor-hours or machine-hours.

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