Answer the following questions using the information below:
Products S5 and CP8 each are assigned $50.00 in indirect costs by a traditional costing system.An activity analysis revealed that although production requirements are identical,S5 requires 45 minutes less set-up time than CP8.
-Managers might be inclined to shy away from ABC systems because of their apparent complexity and the perceived potential for the costs of these systems to exceed the benefits derived.

Question

Quizplus · Accepted Answer

The information provided only mentions a potential reason why managers might shy away from ABC systems, but not that the costs of these systems actually exceed the benefits derived. Therefore, the statement is true.

Answer the Following Questions Using the Information Below