Which of the Following Is True Regarding Activity-Based Costing (ABC)

question 26

Multiple Choice

Which of the following is true regarding activity-based costing (ABC) ?

• A) The benefits of using ABC always outweigh its limitations.
• B) The lower the proportion of overhead costs as compared to direct materials and direct labour costs,the more likely a company will benefit by using ABC.
• C) Companies with a high-proportion of non-unit-level costs should rarely use ABC.
• D) High measurement costs associated with ABC may deter some companies from its use.

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Definitions:

Problem-Solving Procedure

A structured approach to identifying, analyzing, and resolving issues.

Problem-Solving Procedure

A systematic process for identifying, analyzing, and resolving issues or challenges effectively.

Computer-Mediated Communication

The exchange of messages between two or more individuals through digital devices or software platforms.

Face to Face Teams

Groups of individuals working together in the same physical space towards a common goal.