An activity-based costing system should be evaluated with regard to the benefits it can provide an organization versus the costs of implementing it.

Question

Quizplus · Accepted Answer

This statement is true. When considering implementing an activity-based costing system, the benefits should outweigh the costs. This means evaluating whether the system will provide more accurate cost information, improve decision-making, and ultimately lead to increased profitability. However, it is important to carefully consider the costs of implementing the system, including the time and resources required for training, data collection, and system maintenance.

An Activity-Based Costing System Should Be Evaluated with Regard to the Benefits