General Studies · Activity Based Costing
A company currently uses an absorption costing system. Which of the following is UNLIKELY to be a direct consequence of the company switching to an Activity Based Costing (ABC) system?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1Indirect overheads are shared on a more realistic basis using cost drivers.
- 2Product pricing decisions are improved based on more accurate cost allocations.
- 3The prime production cost (direct material and direct labor) of each product will decrease.✓
- 4A better understanding of cost behavior and drivers is achieved.
Correct answer
The prime production cost (direct material and direct labor) of each product will decrease.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Preparing for General Studies?
Practice full-length General Studies mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Activity Based Costing MCQs →Want more practice questions on Activity Based Costing?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in General Studies · Activity Based Costing