In service industries
A) activities cannot be labeled as value-added or non-value-added.
B) the overall objective of ABC is different than in manufacturing industries.
C) a larger proportion of overhead costs are company-wide costs.
D) activity cost pools cannot be identified.

Question

Quizplus · Accepted Answer

In service industries, a larger proportion of overhead costs are company-wide costs as there are fewer direct costs associated with the production of goods. Activities in service industries can still be labeled as value-added or non-value-added, and activity cost pools can still be identified using ABC. The overall objective of ABC is not necessarily different in service industries, but the specific activities and cost drivers may differ from those in manufacturing industries.

In Service Industries