Which of the following is a sign that an ABC system may be useful?
A)There are small amounts of indirect costs.
B)Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity.
C)Products that a company is well-suited to make and sell show large profits; whereas products that a company is less suited to produce and sell show small profits.
D)Operations staff agrees with accountants about the costs of manufacturing and marketing products and services.
E)Almost none of the indirect costs are identified as output unit-level costs.

Question

Quizplus · Accepted Answer

A key benefit of ABC systems is their ability to more accurately assign indirect costs to products based on the diverse demands those products make on resources. Thus, if products have differences in volume, process steps, batch size, or complexity, this could be a sign that an ABC system would be useful.

Which of the Following Is a Sign That an ABC