Companies with higher direct costs in relation to indirect costs are more suitable for activity-based costing.

Name: Companies with higher direct costs in relation to indirect costs are more suitable for activity-based costing.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Activity-based costing is more suitable for companies with high indirect costs because it allocates these costs more accurately to products or services, unlike traditional costing methods which may oversimplify the allocation of indirect costs.

Companies with Higher Direct Costs in Relation to Indirect Costs