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

question 110

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:

Complex Streams

Involves the management and processing of multifaceted data flows that can include a mix of structured, semi-structured, and unstructured data.

Perceptual and Behavioral Decision Traps

Cognitive biases or errors in judgment that can lead individuals to make irrational decisions.

Satisficing

A decision-making strategy that entails selecting the first option that meets a minimum threshold of acceptability, rather than searching for the optimal solution.

Outsourcing

The business practice of hiring a party outside a company to perform services or create goods that traditionally were performed in-house by the company's own employees and staff.