Activity-based costing (ABC) information cannot be used by managerial decision-makers to evaluate the:
A) profitability of a customer.
B) market potential of a product.
C) cost of using a particular supplier.
D) whether to continue providing a service.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) focuses on assigning costs to activities and products based on their actual consumption of resources. It is useful for evaluating costs and profitability but does not directly assess market potential, which involves external factors beyond cost analysis.

Activity-Based Costing (ABC) Information Cannot Be Used by Managerial Decision-Makers