What may be perceived as a drawback of using an activity-based costing (ABC)system?
A)The ABC system may provide more accurate data results.
B)The ABC system may help to establish a better product mix.
C)The ABC system may improve management's ability to control total costs.
D)The ABC may cost more to run and be more complex in nature.

Question

Quizplus · Accepted Answer

The drawback of using an activity-based costing (ABC) system is that it may cost more to run and be more complex in nature compared to traditional costing systems. This is because the ABC system involves identifying and tracking all activities and costs associated with production, which requires more resources and time than other costing methods.

What May Be Perceived as a Drawback of Using an Activity-Based