What might be a reason to not change from a traditionally based costing system to an activity-based costing system?
A)Products or services are similar in volume and activity.
B)Support services are spread evenly throughout the company's activities.
C)Overhead is a low component of the overall cost.
D)All of the above are valid reasons.

Question

Quizplus · Accepted Answer

All the options listed are valid reasons for not switching from a traditional costing system to an activity-based costing system. When products or services are similar in volume and activity, support services are evenly spread, and overhead costs are a low component of the overall cost, the benefits of the detailed insights provided by activity-based costing might not justify the costs and complexities of implementing and maintaining such a system.

What Might Be a Reason to Not Change from a Traditionally