ABC costing information can be useful for estimating the costs of new products and services only if the processes and activities to make them are similar.

Question

Quizplus · Accepted Answer

ABC (Activity-Based Costing) is most effective for estimating costs of new products and services when the new items utilize similar processes and activities to those already analyzed, as it relies on accurate allocation of costs based on specific activities.

ABC Costing Information Can Be Useful for Estimating the Costs