All of the following statements regarding activity-based costing systems are true except they:
A)Can provide more accurate product costs.
B)Identify more costs as indirect costs than do traditional volume-based systems.
C)Are likely to be more time-consuming than volume-based systems.
D)Are used in both manufacturing and non-manufacturing companies.
E)Are likely to have more overhead rates than volume-based systems.

Question

Quizplus · Accepted Answer

Activity-based costing systems actually identify more costs as direct costs rather than indirect costs compared to traditional volume-based systems. This is because ABC systems take into account the different activities required to produce a product, allowing for more accurate allocation of costs.

All of the Following Statements Regarding Activity-Based Costing Systems Are