Which of the following statements is true regarding the identification of activities in an ABC system?
A) All manufacturing companies have identical types of activities.
B) All merchandising companies have identical types of activities.
C) As a business becomes more complex, fewer activities need to be identified.
D) Two different businesses which have the same type of activities can still choose different cost drivers.

Question

Quizplus · Accepted Answer

Two different businesses which have the same type of activities can still choose different cost drivers. Different businesses may have different ways of measuring and allocating costs for the same types of activities in an ABC system, depending on their unique circumstances and cost drivers. Therefore, it is important to identify the appropriate cost drivers for each activity to accurately assign costs to products or services. Choices A, B, and C are all incorrect because they suggest that all companies have identical types of activities, which is not true.

Which of the Following Statements Is True Regarding the Identification