What might be an impediment in changing from a traditionally-based costing system to an activity-based costing system?
A)Management may not be in favour of a change.
B)Excessive costs must be incurred to assist in capturing costs.
C)Most current costs would have to be allocated arbitrarily after the changeover.
D)All of the above are impediments.

Question

Quizplus · Accepted Answer

Management may resist changing to a new costing system, as they may not see the benefits or understand the new system. Additionally, there may be costs associated with implementing the new system, such as software or training. Finally, if the old costing system was based on arbitrary allocations, the transition may require many current costs to be reassigned, which may be difficult or impossible to do accurately.

What Might Be an Impediment in Changing from a Traditionally-Based