Which of the following is a sign that an ABC system may be useful? A. There are small amounts of overhead costs. B. Products a company all show large profits. C. Operations throughout the plant are fairly similar. D. Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity.

Question

Business

Piper Bowen

10 April, 05:55

Which of the following is a sign that an ABC system may be useful? A. There are small amounts of overhead costs. B. Products a company all show large profits. C. Operations throughout the plant are fairly similar. D. Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity.

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Answers (1)

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Audrey Wade · Answer 1

D. Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity.

Explanation:

Note that, in ABC (Activity based costing) system it checks all the activities in any organization and sums up the cost of each activity to all products and services according to the actual consumption of each the activity.

Therefore, this system would reduce the amount of resources incurred by the organization, since it lowers overhead cost.