Which of the Following Is a Limitation of Activity-Based Costing

question 11

Multiple Choice

Which of the following is a limitation of activity-based costing?

• A)more cost pools
• B)less control over overhead costs
• C)poorer management decisions
• D)some arbitrary allocations continue

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Definitions:

Flat-Panel TVs

A type of television featuring a lightweight, thin display technology that occupies less space than traditional CRT TVs.

Consumer Goods

Products and services that are purchased or consumed by individuals for personal or household use.

Capital Goods

Long-lasting goods that are used to produce other goods or services and are not sold directly to consumers.

Law of Increasing Opportunity Costs

states that as production of one good increases, the opportunity cost of producing an additional unit of this good also increases, due to factors of production not being perfectly interchangeable.