Which of the following is a sign that an ABC system may be useful?
A)There are small amounts of overhead costs.
B)Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity.
C)Products a company all show large profits.
D)Operations throughout the plant are fairly similar.

Question

Quizplus · Accepted Answer

When products make diverse demands on resources due to differences in volume, process steps, batch size, or complexity, an ABC system can be helpful in accurately assigning costs to those products. If there are small amounts of overhead costs or operations throughout the plant are fairly similar, then ABC may not be necessary. Profitability of products is also not a determining factor in the need for ABC.

Which of the Following Is a Sign That an ABC