Which of the following statements is false?
A) Under conventional costing,product cost distortions will be relatively insignificant if overhead costs are a small proportion of product cost.
B) Activity-based costing will significantly improve the product cost accuracy where overhead costs are a small proportion of total costs.
C) Activity-based costing will significantly improve product cost accuracy where there is significant product diversity.
D) Upstream and downstream costs are often a significant part of a product's costs.

Question

Quizplus · Accepted Answer

Activity-based costing is designed to improve product cost accuracy by allocating overhead costs more accurately to products, regardless of the proportion of overhead costs to total costs. Therefore, statement B is false.

Which of the Following Statements Is False