The presence of any of the following factors would suggest a switch to ABC except when
A) product lines differ greatly in volume.
B) overhead costs constitute a minor portion of total costs.
C) the manufacturing process has changed significantly.
D) production managers are ignoring data provided by the existing system.

Question

Quizplus · Accepted Answer

Activity-Based Costing (ABC) is most beneficial when overhead costs are a significant portion of total costs, making B the exception. ABC is particularly useful for companies with diverse product lines, significant overhead, changes in manufacturing processes, or when existing cost data is not being effectively utilized, addressing the scenarios in A, C, and D respectively.

The Presence of Any of the Following Factors Would Suggest