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

question 18

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 labour-based costing system.
• B) Changing from a traditional direct labour-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:

Nonequivalent

Not equal in value, measure, force, effect, significance, etc.; lacking equivalence or equality.

Obverse

The proposition that results from changing the quality of a categorical proposition and replacing the predicate term with its complement.

Contrapositive

The proposition that results from replacing the subject term in a categorical proposition with the complement of the predicate and the predicate with the complement of the subject.

Referents

Objects, events, or entities in the real world to which words or symbols refer or correspond, in the context of language and communication.