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

question 16

Multiple Choice

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

• A) More cost pools
• B) Less control over overhead costs
• C) ABC can be expensive to use
• D) Poorer management decisions

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Definitions:

Decision-Making Processes

The methods or steps taken by individuals or groups to choose among alternatives to arrive at a solution or determination.

Manufacturing Equipment

Machinery and tools used in the process of producing goods from raw materials.

Learning Culture

A culture that supports an ongoing, voluntary, and self-motivated pursuit of knowledge to enhance personal and organizational development.

Experimentation

The act of conducting tests or trials to explore hypotheses or understand the effects of variables in a controlled setting.