Companies that use only one or two cost pools rather than several cost pools
A)incurs more cost of record keeping.
B)will experience more profit than if more pools are used.
C)may price products incorrectly due to inaccurate cost allocation.
D)are likely to be using ABC.

Question

Quizplus · Accepted Answer

Using only one or two cost pools can lead to inaccurate cost allocation, which may result in incorrect pricing decisions. This can ultimately impact the company's profitability. Therefore, it is important to use multiple cost pools or adopt an activity-based costing (ABC) system to ensure accurate cost allocation.

Companies That Use Only One or Two Cost Pools Rather