Which of the following is false regarding activity-based costing (ABC)?
A) Companies that have a high potential for cost distortions are more likely to benefit with ABC.
B) Opportunities for continuous improvement are rarely revealed by using ABC.
C) The cost of implementing ABC may outweigh the benefits.
D) Increased accuracy with budgeting resources is often realized.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) is designed to reveal opportunities for continuous improvement by providing a more accurate and detailed view of cost drivers and activities. Therefore, option B is false because it suggests that ABC does not reveal opportunities for continuous improvement. Options A, C, and D are true regarding ABC.

Which of the Following Is False Regarding Activity-Based Costing (ABC)