The use of activity-based costing is most appropriate for:
A)Firms that manufacture multiple product lines.
B)Firms that have very low manufacturing overhead costs relative to other costs of production.
C)Firms with high levels of production activity.
D)Firms that are labor intensive.
E)Firms that manufacture a small number of product lines.

Question

Quizplus · Accepted Answer

Activity-based costing is most appropriate for firms that manufacture multiple product lines because it allows for more accurate allocation of overhead costs to specific products, which can be difficult with traditional cost accounting methods when multiple product lines are involved.

The Use of Activity-Based Costing Is Most Appropriate For