Answer the following questions using the information below:
Products S5 and CP8 each are assigned $50.00 in indirect costs by a traditional costing system.An activity analysis revealed that although production requirements are identical,S5 requires 45 minutes less set-up time than CP8.
-Before anyone is able to evaluate an ABC system,he/she must review all facets of the design,application and context of that ABC system.

Question

Quizplus · Accepted Answer

The information provided suggests that there may be differences in the actual cost drivers for S5 and CP8, which is something that an ABC system would be able to capture. However, before evaluating an ABC system, it is important to consider all aspects of its design, application, and context to ensure that it is appropriate for the specific organization and its needs.

Answer the Following Questions Using the Information Below