There will be little benefit to using an activity-based costing system when products are vastly different from each other and consume different amounts of resources.

Question

Quizplus · Accepted Answer

Activity-based costing is designed to provide a more accurate cost allocation by tracing the cost of each activity to the products that consume it. This system is suitable for companies that produce different products or services that consume different resources. Therefore, there will be a benefit to using an activity-based costing system even when products are vastly different from each other and consume different amounts of resources.

There Will Be Little Benefit to Using an Activity-Based Costing