(Appendix 5B)Why would an activity-based costing system that is designed for internal decision making NOT conform to generally accepted accounting principles?
A) Some manufacturing costs (i.e.,the costs of idle capacity and organization-sustaining costs)will not be assigned to products.
B) Some non-manufacturing costs are assigned to products.
C) First-stage allocations may be based on subjective interview data.
D) All of the above.

Question

Quizplus · Accepted Answer

Activity-based costing systems are designed to provide more accurate product costs for internal decision making by assigning costs to products based on their specific activities. However, this may not conform to generally accepted accounting principles because: 
A) Certain costs such as idle capacity and organization-sustaining costs are difficult to assign to products accurately.
B) Some non-manufacturing costs such as marketing and administrative expenses may also be assigned to products, which may not be in accordance with traditional costing methods.
C) First-stage allocations may be based on subjective interview data, which may not be considered reliable under generally accepted accounting principles. Therefore, activity-based costing may deviate from the principles of traditional cost accounting methods.

(Appendix 5B)Why Would an Activity-Based Costing System That Is Designed