Which of the following types of companies would be most likely to benefit from activity-based costing?
A) Companies with a low potential for cost distortions
B) Companies that have a large proportion of unit-level costs
C) Companies that have a relatively high proportion of overhead compared to direct materials and direct labor
D) None of these

Question

Quizplus · Accepted Answer

Companies that have a relatively high proportion of overhead compared to direct materials and direct labor are most likely to benefit from activity-based costing because it provides a more accurate method of allocating overhead costs to products or services based on the activities that drive those costs.

Which of the Following Types of Companies Would Be Most