Which of the following statements about activity-based costing (ABC) is False? A

Question

Which of the following statements about activity-based costing (ABC) is False?

A. ABC cannot be used by service businesses.
B. ABC, in conjunction with activity-based management, can help a company eliminate (or reduce) non-value-added costs.
C. In comparison with traditional-costing systems, ABC results in less cost averaging of various diversified activities.
D. In comparison with traditional-costing systems, ABC results in more costs being classified as direct costs.
E. ABC tends to reduce cost distortion among product lines.

Explanation / Answer

The correct answer is A. ABC can be used by service businesses Source: http://rockfordconsulting.com/activity-based-costing(ABC).htm B is true C is true D is true E is true

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