Question

Which of the following statements about activity-based costing is correct?

A.	Activity-based costing and activity-based management techniques are not limited to manufacturing companies. Service providers may benefit from implementing activity-based management, but the cost and time of activity-based costing far exceeds the benefits.

B.

Activity-based .costing and activity-based management techniques are limited to manufacturing companies. Service providers, non-profit organizations, retailers, and governments cannot benefit from implementing some form of activity-based costing and activity-based management because they are prohibitively expensive.

C.

Activity-based costing and activity-based management techniques are not limited to manufacturing companies. Service providers, non-profit organizations, retailers, governments – virtually all organizations – can benefit from implementing some form of activity-based costing and activity-based management

D.

Activity-based costing and activity-based management techniques must be limited to manufacturing companies. Service providers, non-profit organizations, retailers, governments – any organization that does not have a plant or cannot allocate costs to a plant – cannot benefit from implementing some form of activity-based costing or activity-based management.

Answer 1

The Correct answer is (C)

Activity-based costing and activity-based management techniques are not limited to manufacturing companies. Service providers, non-profit organizations, retailers, governments – virtually all organizations – can benefit from implementing some form of activity-based costing and activity-based management

Activity Based costing is a method of allocating overhead to various product and services

It is useful for all kinds of enterprise as it will give them better picture of profitability