Activity based costing is most effective when it is implemented in an environment that supports total quality management

Question

Quizplus · Accepted Answer

Activity based costing requires accurate and detailed data, which can be obtained through a total quality management system that focuses on identifying and eliminating waste and inefficiencies in processes. This is because quality management systems help to measure and improve the performance of all activities involved in producing a product or providing a service, which is essential to implementing activity based costing effectively.

Activity Based Costing Is Most Effective When It Is Implemented