A company would not use an activity-based costing system to:
A) evaluate product profitability.
B) assist them in the budgeting process.
C) allocate nonmanufacturing related costs.
D) determine a product's selling price when target costing is being used.

Question

Quizplus · Accepted Answer

Activity-based costing is used to allocate costs more accurately to products, but when target costing is used, the selling price is determined by market conditions and customer expectations, not by the cost of production.

A Company Would Not Use an Activity-Based Costing System To