Activity-based-costing systems are costly, time-consuming to implement, and do not improve the ability of an analyst to estimate the cash flows associated with a proposed project.

Question

Quizplus · Accepted Answer

Activity-based costing (ABC) systems, while potentially costly and time-consuming to implement, can significantly improve the accuracy of cost and profitability analysis, including the estimation of cash flows associated with proposed projects, by more accurately tracing costs to activities and products.

Activity-Based-Costing Systems Are Costly, Time-Consuming to Implement, and Do Not