Which of the following would be a likely disadvantage of activity-based costing (ABC)?
A) A decrease in a company's ability to accurately prepare budgets for the upcoming period.
B) A decrease in a company's ability to find opportunities for continuous improvement.
C) An increase in the accuracy of product cost information.
D) An increase in the cost of obtaining accurate product cost information.

Question

Quizplus · Accepted Answer

The implementation of activity-based costing requires identifying and tracking various activities and their associated costs, which can increase the cost of obtaining accurate product cost information. Therefore, option D is a likely disadvantage of activity-based costing. Options A and B are unlikely disadvantages as activity-based costing provides more accurate cost information and helps identify opportunities for continuous improvement. Option C is a likely advantage of activity-based costing, rather than a disadvantage.

Which of the Following Would Be a Likely Disadvantage of Activity-Based