Activity-based costing is most likely to yield benefits for companies with all of the following characteristics EXCEPT:
A)numerous products that consume different amounts of resources
B)operations that remain fairly consistent
C)a highly competitive environment, where cost control is critical
D)accessible accounting and information systems expertise to maintain the system

Question

Quizplus · Accepted Answer

Activity-based costing is designed to identify the true cost of producing each product or service by assigning overhead costs based on the specific activities that are required to produce each product. This is most effective in situations where there are significant differences in the resources required to produce each product. If operations remain fairly consistent, there may not be as much benefit to implementing an activity-based costing system.

Activity-Based Costing Is Most Likely to Yield Benefits for Companies