As product diversity and direct costs increase,it is usually best to switch away from a ________ cost system and move to a ________ cost system.
A)low;high-based
B)job;activity-based
C)broad;job-based
D)activity;broad-based
E)broad;activity-based

Question

Quizplus · Accepted Answer

As product diversity and direct costs increase, it becomes more difficult to accurately allocate overhead costs using a broad-based cost system. An activity-based cost system allows for more precise allocation of costs based on the specific activities that are driving the costs. Therefore, it is best to switch away from a broad-based cost system and move to an activity-based cost system.

As Product Diversity and Direct Costs Increase,it Is Usually Best