Which of the following statements about activity-based costing is NOT true?
A)ABC is useful for allocating marketing and distribution costs.
B)ABC is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products.
C)ABC seeks to distinguish batch-related, product-sustaining, and business-sustaining costs, especially when they are not proportionate to one another.
D)ABC differs from traditional costing systems in that products are not cross-subsidized.

Question

Quizplus · Accepted Answer

ABC is more likely to result in major differences from traditional costing systems if the firm manufactures multiple products rather than only one product. This is because ABC allocates costs based on specific activities and resources used, rather than on broad averages, making it more accurate for complex situations with multiple products or processes. The other statements are true.

Which of the Following Statements About Activity-Based Costing Is NOT