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

question 128

Multiple Choice

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

• A) Activity-based costing ignores the allocation of marketing and distribution costs.
• B) Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products.
• C) Activity-based costing classifies some of the indirect costs as direct costs.
• D) Chances of product-cost cross-subsidization are higher in activity-based costing compared to traditional costing systems.

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