In the context of ABC, cross-subsidization refers to:
A)Production departments subsidizing each other.
B)Costing inaccuracies which affect the relative profitability of products.
C)Cross-selling products lines, which affect customer profitability.
D)Efforts to increased coordination among department heads.
E)None of the above.

Question

Quizplus · Accepted Answer

Cross-subsidization in the context of ABC refers to the inaccurate allocation of costs that can result in certain products or services appearing more profitable than they actually are, while others appear less profitable. This can lead to decisions being made that are not in the best interests of the company.

In the Context of ABC, Cross-Subsidization Refers To