Which of the Following Statements Is True Regarding Activity-Based Costing

question 6

Multiple Choice

Which of the following statements is true regarding activity-based costing systems?

• A) ABC systems accumulate overhead costs by departments.
• B) ABC costing systems are less complex and, therefore, less costly than traditional systems.
• C) ABC costing systems can be used in manufacturing firms only.
• D) ABC costing systems have multiple indirect cost allocation rates for each activity.
• E) ABC systems provide a greater level of detail to understand how an organization uses its common inputs differently for distinct products.

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