Consider the following statements. Which of the statements is true?
A) As the activity-based system accuracy increases, the cost of inferior decisions based on distorted product costs decreases.
B) As the activity-based system accuracy increases, the costs of implementing and operating the system increase.
C) As the activity-based system accuracy increases, the total cost from inferior decisions and the cost to implement and operate the system decrease.
D) As the activity-based system accuracy increases, the cost of inferior decisions based on distorted product costs decreases AND as the activity-based system accuracy increases, the costs of implementing and operating the system increase.

Question

Quizplus · Accepted Answer

Both statements A and B are partially true, but the correct statement is D, which combines them. As the activity-based system accuracy increases, the cost of inferior decisions based on distorted product costs decreases, which is a benefit of the system. However, as the accuracy increases, the costs of implementing and operating the system also increase, which is a drawback of the system. Therefore, statement D is the most accurate choice.

Consider the Following Statements