Which of the following types of companies would be most likely to benefit from activity-based costing?
A) Companies with a low potential for cost distortions
B) Companies that have a large proportion of unit-level costs
C) Companies that have a relatively high proportion of overhead compared to direct materials and direct labour
D) None of these

Question

Quizplus · Accepted Answer

Activity-based costing is most beneficial for companies with a relatively high proportion of overhead costs compared to direct materials and direct labor, as it allows for more accurate allocation of overhead costs to products or services based on the activities that generate those costs.

Which of the Following Types of Companies Would Be Most