As the number of activities in an ABC system increases, measurement error tends to:
A) Decrease
B) Increase
C) Remain the same
D) Make it difficult to identify the cost driver

Question

Quizplus · Accepted Answer

As the number of activities in an Activity-Based Costing (ABC) system increases, the complexity of tracking and measuring those activities also increases. This can lead to greater potential for measurement error because there are more processes and calculations involved, each with its own chance for mistakes or inaccuracies.

As the Number of Activities in an ABC System Increases