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

question 82

Multiple Choice

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

• A)Maintaining an activity-based costing system is more costly than maintaining a traditional direct labor-based costing system.
• B)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.
• C)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.
• D)More accurate product costs may result in increasing the selling prices of some products.

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Definitions:

Just-World Phenomenon

The cognitive bias that a person's actions are inherently inclined to bring morally fair and fitting consequences to that person, essentially believing in a just world.

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The boundary line where the ocean meets the land.

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Preconceived opinion that is not based on reason or actual experience, often directed toward a person or group.

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Negative emotions or stress resulting from economic conditions, like unemployment or inflation, affecting one's financial stability.