Which of the Following Is False Regarding Activity-Based Costing (ABC)

question 41

Multiple Choice

Which of the following is false regarding activity-based costing (ABC) ?

• A) Companies that have a high potential for cost distortions are more likely to benefit with ABC.
• B) Opportunities for continuous improvement are rarely revealed by using ABC.
• C) The cost of implementing ABC may outweigh the benefits.
• D) Increased accuracy with budgeting resources is often realized.

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Definitions:

Peritubular Capillary Network

A network of tiny blood vessels that surrounds the tubules in the kidneys, playing a critical role in the process of reabsorption and exchange of substances between blood and the tubular fluid.

Afferent Arteriole

A small artery that leads toward the capillaries of the glomerulus in the kidney, playing a key role in the filtration of blood.

Efferent Arteriole

A small blood vessel that carries blood away from the glomerulus of the kidney to the peritubular capillaries, playing a key role in regulating blood pressure and filtration rate in the kidney.

Renal Vein

A vein that carries purified blood away from the kidneys back to the heart.