ABC systems:
A)allocate costs based on the overall level of activity.
B)limit cost drivers to units of output.
C)generally under-cost complex products.
D)highlight the different levels of activities.

Question

Quizplus · Accepted Answer

ABC systems highlight the different levels of activities, which allow for a more accurate allocation of costs to products or services based on their actual consumption of resources. Options A and B are incorrect, as ABC systems do not allocate costs based on the overall level of activity nor limit cost drivers to units of output. Option C is also incorrect since ABC systems tend to over-cost complex products, not under-cost them.

ABC Systems