The benefits of using the ABC costing system are higher if the company
A) has high indirect costs.
B) produces many different products that use differing amounts of resources.
C) produces only one product.
D) has high indirect costs and produces many different products that use differing amounts of resources.

Question

Quizplus · Accepted Answer

The ABC costing system is most beneficial for companies that have high indirect costs and produce many different products that use differing amounts of resources. This is because the ABC system allows for more accurate allocation of indirect costs to the products that actually consume those resources. If a company produces only one product, the benefits of using the ABC system may be limited.

The Benefits of Using the ABC Costing System Are Higher