The primary benefit of ABC is it provides
A) better management decisions.
B) enhanced control over overhead costs.
C) more cost pools.
D) more accurate product costing.

Question

Quizplus · Accepted Answer

The primary benefit of ABC is that it provides more accurate product costing by assigning overhead costs to specific activities and then to products based on their use of those activities. This results in a clearer understanding of the true cost of producing a product and informs better management decisions. While ABC may lead to enhanced control over overhead costs and more cost pools, these are secondary benefits to the primary benefit of more accurate product costing.

The Primary Benefit of ABC Is It Provides