The benefits of using the ABC costing system are higher if the company
A)has high indirect costs.
B)produces many different products that use differing amounts of resources.
C)has high indirect costs and produces many different products that use differing amounts of resources.
D)produces only one product.

Question

Quizplus · Accepted Answer

The ABC costing system is most beneficial for companies that have high indirect costs and produce many different products that use differing amounts of resources. This is because this system is designed to allocate indirect costs more accurately based on the actual resources used by each product. If a company only produces one product, the benefits of using ABC costing may not be as significant.

The Benefits of Using the ABC Costing System Are Higher