Which of the following statements concerning an activity-based cost (ABC)system is(are)correct?

Question

Quizplus · Accepted Answer

Statement (a) is true as ABC analysis provides detailed information about the activities associated with a particular product or customer segment and how these activities are connected to revenue generation and resource consumption. Statement (b) is false as ABC analysis avoids the use of arbitrary percentage allocations and instead allocates costs based on the actual consumption of resources by an activity. Statement (c) is also true as ABC analysis is designed to segregate indirect and support resource expenses by activities to enhance cost accuracy. Therefore, only statements (a) and (c) are correct, making option E the correct answer.

Which of the Following Statements Concerning an Activity-Based Cost (ABC)system