A major advantage in changing from a traditionally based costing system to an activity-based costing system is
A)a company's customers can benefit from any reduction in costs.
B)management will be able to identify the true cost of non-added-value activities.
C)direct labour and material costs will be reduced.
D)supplier costs will be reduced after the changeover.

Question

Quizplus · Accepted Answer

Activity-based costing system provides a more accurate way to allocate costs to products or services. It helps to identify the true cost of non-added-value activities and reduce or eliminate them, resulting in a more efficient and cost-effective operation. This benefit is not directly related to the customers, direct labor and material costs, or supplier costs.

A Major Advantage in Changing from a Traditionally Based Costing