Cost of acquiring reliable data is considered when choosing a cost-allocation base to allocate costs in ABC systems.

Question

Quizplus · Accepted Answer

The cost of acquiring reliable data is one of the factors that need to be considered when choosing a cost-allocation base in ABC systems. Choosing a cost-allocation base that requires excessive data collection efforts or that cannot be measured accurately can result in inaccurate cost allocations and hinder the usefulness of the system. Therefore, it is important to carefully evaluate the reliability and availability of data before selecting a cost-allocation base.

Cost of Acquiring Reliable Data Is Considered When Choosing a Cost-Allocation