Question

ABC systems ________. Select one: a. usually will undercost complicated or complex products b. will limit...

ABC systems ________.

Select one:

a. usually will undercost complicated or complex products

b. will limit cost drivers to units of output

c. highlight the different levels of activities

d. will allocate costs based on the overall level of activity

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Answer #1

ABC Systems highlight the different levels of activities.

Hence, correct option is (C)

In this technique, the items of inventory are classified according to the value of usage. Materials are classified as A, B and C according to their value. The principle to be followed is that the high value items should be controlled more carefully while items having small value though large in numbers can be controlled periodically. In ABC Systems, costs are not allocated based on overall level of activity. Hence, options (A), (B) and (D) are not correct.

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