2 Which of the following is NOT a limitation of activity-based costing? Select one: a. Changing from a traditional direct labour-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers. b. More accurate product costs may result in increasing the selling prices of some products. c. In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system. This results in overstated costs. d. Maintaining an activity-based costing system is more costly than maintaining a traditional direct labour-based costing system.
2 Which of the following is NOT a limitation of activity-based costing? Select one: a. Changing from a traditional direct labour-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers. b. More accurate product costs may result in increasing the selling prices of some products. c. In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system. This results in overstated costs. d. Maintaining an activity-based costing system is more costly than maintaining a traditional direct labour-based costing system.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2
Which of the following is NOT a limitation of activity-based costing?
Select one:
a. Changing from a traditional direct labour-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers.
b. More accurate product costs may result in increasing the selling prices of some products.
c. In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system. This results in overstated costs.
d. Maintaining an activity-based costing system is more costly than maintaining a traditional direct labour-based costing system.
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