In the context of ABC,cross-subsidization refers to:
A)Productions department subsidizing each other
B)Costing inaccuracies which affect the relative profitability of products
C)Cross-selling products lines,which affect customer profitability
D)Efforts to increased coordination among department heads

Question

Quizplus · Accepted Answer

Cross-subsidization in ABC refers to the situation where products or services that are less complex or consume fewer resources are charged an excessive cost relative to the actual cost, while complex products are under-priced. Such inaccuracies affect the profitability of products and services, leading to incorrect investment decisions.

In the Context of ABC,cross-Subsidization Refers To