Activity-based costing is most likely to yield benefits for companies ________.
A) with complex product design processes that vary significantly from product to product
B) with operations that remain fairly consistent across product lines
C) in a monopolistic market
D) having nominal percentage of indirect costs

Question

Quizplus · Accepted Answer

Activity-based costing is best suited for companies with complex product design processes that have varying costs associated with them. It helps to identify the true costs of each product and can be beneficial for accurately pricing products and improving profitability. It would not be as useful for companies where operations remain fairly consistent across product lines, where traditional costing methods may suffice.

Activity-Based Costing Is Most Likely to Yield Benefits for Companies