A Major Disadvantage of Activity-Based Costing (ABC) in a Government

question 53

True/False

A major disadvantage of activity-based costing (ABC) in a government setting is the very limited number of activities for which it can be used.

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Definitions:

Average Expenses

The mean amount of costs incurred over a specified period.

Manufacturing Overhead Budget

A financial plan outlining the projected indirect production costs, such as utilities and maintenance, for a specific period.

Direct Labor-Hour

A measure of the labor time involved in producing a unit of output, often used in costing and budgeting.

Variable Manufacturing Overhead

Costs associated with manufacturing that vary with production volume, such as indirect materials and utilities.