A major disadvantage of activity-based costing (ABC)in a governmental setting is the very limited number of activities for which it can be used.

Question

Quizplus · Accepted Answer

The statement is not true. ABC can be used in a governmental setting for a wide range of activities, including programmatic activities, support activities, and administrative activities. However, there may be challenges in identifying and defining the activities and cost drivers, which may limit the practical application of ABC in some governmental organizations.

A Major Disadvantage of Activity-Based Costing (ABC)in a Governmental Setting