Activity-based costing information:
A)may assist in improving product design and efficiency.
B)should be used when services place similar demands on resources.
C)will yield inaccurate cost numbers when products are similar.
D)does not support activity-based management.

Question

Quizplus · Accepted Answer

Activity-based costing provides a more accurate way of assigning costs to products or services based on the activities and resources used to produce them. This information can be used to improve product design and efficiency by identifying ways to reduce costs and improve profitability. Option B is incorrect as ABC is specifically designed to be used when services place different or unique demands on resources. Option C is incorrect as ABC is actually designed to provide more accurate cost numbers for products that may appear similar under traditional costing methods. Option D is incorrect as ABC supports activity-based management by providing detailed information on how resources are used and where efficiencies can be gained.

Activity-Based Costing Information