If activity-based costing is implemented in an organization without any other changes being implemented,total overhead manufacturing costs will
A)be reduced because of the elimination of non-value-added activities.
B)be reduced because organizational costs will not be assigned to products or services.
C)be increased because of the need for additional people to gather information on cost drivers and cost pools.
D)remain constant and simply be spread over products using different cost drivers.

Question

Quizplus · Accepted Answer

Implementing activity-based costing does not necessarily reduce or increase total overhead manufacturing costs. Rather, it changes how those costs are assigned to products or services by using different cost drivers to allocate overhead to specific activities. Overall, the total amount of overhead remains the same, but the distribution of that overhead may change.

If Activity-Based Costing Is Implemented in an Organization Without Any