Which of the following statements about activity based costing is not true?
A) Activity based costing differs from traditional costing systems in that products are not cross subsidized
B) In activity based costing, cost drivers are usually what cause costs to be incurred
C) Activity based costing is more likely to result in major differences from traditional costing systems if . the firm manufactures only one product rather than multiple products
D) Activity based costing is useful for allocating marketing and distribution costs

Question

Quizplus · Accepted Answer

Activity based costing (ABC) is more likely to show its benefits in environments where a company manufactures multiple products rather than just one. This is because ABC helps in identifying the actual costs associated with each product, which is particularly useful when the products consume resources at different rates. In a single-product scenario, the differences between ABC and traditional costing might not be as pronounced since there's less complexity in the allocation of costs.

Which of the Following Statements About Activity Based Costing Is