Which of the Following Is Not a Limitation of Activity-Based

question 25

Multiple Choice

Which of the following is not a limitation of activity-based costing?

• A) More accurate product costs may result in better decisions.
• B) Changing from a traditional direct labour based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers.
• C) Implementing an activity based costing system is more costly than implementing a traditional direct labour-based costing system.
• D) In practice,most managers insist on fully allocating all costs to products,customers,and other costing objects in an activity based costing system.This results in overstated costs.

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