Activity-based costing systems provide better product costs when they:
A)employ more activity cost drivers.
B)employ fewer activity cost drivers.
C)identify and cost more overhead cost differences among products.
D)always yield more accurate product costs than traditional cost systems.

Question

Quizplus · Accepted Answer

Activity-based costing systems identify and cost more overhead cost differences among products, leading to better product costs. Employing more or fewer activity cost drivers depends on the specific situation and does not necessarily guarantee better product costs. It is also not always the case that activity-based costing systems yield more accurate product costs than traditional cost systems.

Activity-Based Costing Systems Provide Better Product Costs When They