Which of the following is not a limitation of activity-based costing? - 14269

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Which of the following is not a limitation of activity-based costing?

  • Maintaining an activity-based costing system is more costly than maintaining a traditional direct labor-based costing system.
  • Changing from a traditional direct labor-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers.
  • In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system. This results in overstated costs.
  • More accurate product costs may result in increasing the selling prices of some products.
Solution Description

Which of the following is not a limitation of activity-based costing?

  • Maintaining an activity-based costing system is more costly than maintaining a tradit