Before using activity-based costing (ABC),managers must apply the cost-benefit principle to the additional recordkeeping costs associated with ABC.

Question

Quizplus · Accepted Answer

The statement correctly describes the importance of applying cost-benefit analysis when considering the implementation of an activity-based costing system. Cost-benefit analysis helps managers weigh the potential benefits of improved cost accuracy and decision-making against the additional costs of implementing and maintaining the new system. Therefore, option A is the correct answer.

Before Using Activity-Based Costing (ABC),managers Must Apply the Cost-Benefit Principle