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

question 29

Multiple Choice

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

• A) More accurate product costs may result in increasing the selling prices of some products.
• B) Complex products are assigned a larger portion of overhead.
• C) Changing from a traditional direct labor-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers.
• D) Maintaining an activity-based costing system is more costly than maintaining a traditional direct labor-based costing system.
• E) 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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Definitions:

Central Canals

Hollow spaces within the spinal cord that contain cerebrospinal fluid, playing a crucial role in the protection and nourishment of the spinal cord.

Neuroglial Cells

Specialized cells in the nervous system that provide support, protection, and nutrition to neurons, playing a crucial role in the maintenance of the neural environment.

Neurons

Cells of the nervous system specialized in conducting electrical impulses, allowing communication between the brain and different parts of the body.

Brain Volume

The total space occupied by brain tissue, often measured in neurological studies as an indicator of brain health and development.