Activity-based costing is appropriate for a company that has low overhead costs that are proportional to the unit volumes of products.

Question

Quizplus · Accepted Answer

Activity-based costing is most appropriate for companies with high overhead costs that are not easily allocated to specific products or services. It is designed to more accurately allocate indirect costs based on the specific activities or processes that drive those costs, making it a more accurate method for companies with complex cost structures.

Activity-Based Costing Is Appropriate for a Company That Has Low