Which of the following statements regarding activity-based costing (ABC)is false?
A) ABC can be used to measure the cost of cost objects.
B) ABC can be used to analyse the profitability of customers.
C) ABC is not an appropriate tool for analysing non-manufacturing costs.
D) ABC evolved as a response to problems with conventional costing systems.

Question

Quizplus · Accepted Answer

ABC can be used not only for measuring the cost of manufacturing products but also for analysing the profitability of customers, services, and even non-manufacturing activities. Therefore, statement C is false as ABC is an appropriate tool for analysing non-manufacturing costs.

Which of the Following Statements Regarding Activity-Based Costing (ABC)is False