ABC systems ________.
A) usually will undercost complicated or complex products
B) will limit cost drivers to units of output
C) highlight the different levels of activities
D) will allocate costs based on the overall level of activity

Question

Quizplus · Accepted Answer

ABC systems highlight the different levels of activities by identifying and allocating costs to activities rather than only to products or services. This allows for more accurate determination of cost drivers, which can lead to more precise costing of products and services. A is incorrect because ABC systems are designed to more accurately cost complicated or complex products. B is incorrect because ABC systems can use multiple cost drivers, not just units of output. D is incorrect because ABC systems do not allocate costs based solely on the overall level of activity, but rather on the specific activities that drive costs.

ABC Systems ________