An activity-based costing system
A)can provide a much more complete picture of cost-volume-profit relationships.
B)is not compatible with cost-volume-profit relationships because not all costs are based on volumes.
C)is too expensive to combine with a cost-volume-profit model.
D)cannot utilize cost-volume-profit relationships.

Question

Quizplus · Accepted Answer

An activity-based costing system can provide a more accurate and detailed picture of cost-volume-profit relationships because it allocates costs based on activities and their consumption by products or services. This allows for a better understanding of the costs of various activities and the impact they have on profits. Therefore, choice A is the best answer. Choices B, C, and D are incorrect since they contain inaccurate or incomplete information.

An Activity-Based Costing System