Accounting · Cost Accounting
Which of the following statements about Activity-Based Costing (ABC) is INCORRECT?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1In ABC, cost drivers are the direct factors or activities that cause costs to be incurred.
- 2ABC differs from traditional costing systems as it identifies specific activities as the primary cost objects before allocating them to products.
- 3ABC is highly beneficial for the accurate allocation of marketing and distribution costs.
- 4ABC is more likely to result in a massive difference from traditional costing systems if a company produces a single standardized product instead of multiple diverse products.✓
Correct answer
ABC is more likely to result in a massive difference from traditional costing systems if a company produces a single standardized product instead of multiple diverse products.
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