ABC systems provide greater insight than traditional systems into the management of indirect costs.

Question

Quizplus · Accepted Answer

ABC systems are designed to allocate indirect costs to products or services based on multiple cost drivers, providing more accurate information about the actual cost of producing goods or delivering services. This allows for better management and decision-making regarding indirect costs. In contrast, traditional systems may use single cost drivers or averaged overhead rates, which can lead to distorted or inaccurate cost information.

ABC Systems Provide Greater Insight Than Traditional Systems into the Management