Before using activity-based costing (ABC), managers must apply the cost-benefit principle to the additional recordkeeping costs associated with ABC.

Name: Before using activity-based costing (ABC), managers must apply the cost-benefit principle to the additional recordkeeping costs associated with ABC.
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Question

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Managers should evaluate whether the benefits of implementing ABC, such as more accurate cost information, outweigh the additional costs and effort required for its recordkeeping.

Before Using Activity-Based Costing (ABC), Managers Must Apply the Cost-Benefit