Ask Question
28 August, 11:47

ABC system are likely to provide the most benefits to a company with significant amounts of indirect costs that are allocated using just one or two costs pools and products that make diverse demands on resources.

a) true

b) false

Answers (1)
  1. 28 August, 12:02
    B) false


    Absorption based costing (ABC) is best suited for companies that have wide overheads and diverse activities, i. e. need several cost pools. ABC allocates costs and resources to activities and the drivers are assigned to each activity, so the more complex processes are the ones that benefit the most from ABC.
Know the Answer?