Activity-based costing would be most useful in a company that
A) manufactures standardized products, such as bricks.
B) has recently implemented a responsibility accounting system.
C) makes many kinds of products in significantly different volumes.
D) is showing profits for high-volume, easy-to-make products.
E) has relatively low overhead costs.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) is most useful in companies that produce a wide variety of products in significantly different volumes. ABC helps in accurately allocating overhead costs based on the actual activities that contribute to overhead, making it particularly beneficial for complex production environments.

Activity-Based Costing Would Be Most Useful in a Company That