Which of the following statements is true regarding the identification of activities in an ABC system?
A) All manufacturing companies should have identical types of activities.
B) All merchandising companies should have identical types of activities.
C) As a business becomes more complex,fewer activities need to be identified.
D) Two different businesses which have the same type of activities can still choose different cost drivers.

Question

Quizplus · Accepted Answer

Two different businesses may have the same activities, but they can still choose different cost drivers to allocate those activity costs. This is because cost drivers can vary based on a business's unique characteristics, production processes, and cost behavior patterns. Additionally, as a business becomes more complex, it may require the identification of more activities to accurately capture the cost of activities performed. Therefore, options A and B are incorrect, and option C is false.

Which of the Following Statements Is True Regarding the Identification