In the activity identification stage of implementing an activity-based costing system,the greater the level of detail
A)The less likely the company will be to have a net loss.
B)The greater the chance of misclassifying some costs and activities
C)The less likely to misclassify some costs and activities
D)None of these ans choices are correct.

Question

Quizplus · Accepted Answer

The greater the level of detail in the activity identification stage, the greater the chance of misclassifying some costs and activities. This is because with more detail, there is a higher likelihood of overlap or ambiguity in identifying and assigning costs to specific activities, leading to misallocation of costs. However, this does not necessarily affect the company's likelihood of having a net loss.

In the Activity Identification Stage of Implementing an Activity-Based Costing