Question

Describe four signs that help indicate when ABC systems are likely to provide the most benefits. ​(Select the four statements that​ apply.) A. Operations staff is in agreement with the reported costs of manufacturing and marketing products and services. B. All or most direct costs are identified as either​ batch-level costs or​ product-sustaining costs. C. Significant amounts of indirect costs are allocated using only one or two cost pools. D. All or most indirect costs are identified as output​ unit-level costs. E. Products make diverse demands on resources because of differences in​ volume, process​ steps, batch​ size, or complexity. F. Products that a company is well suited to make and sell show small​ profits, whereas products that a company is less suited to produce and sell show large profits.

Answer 1

Answer:

C. Significant amounts of indirect costs are allocated using only one or two cost pools.

D. All or most indirect costs are identified as output​ unit-level costs.

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

F. Products that a company is well suited to make and sell show small​ profits, whereas products that a company is less suited to produce and sell show large profits.

Explanation:

ABC (activity based costs) method focuses on individual activities as the main cost objects. After it determines the cost of individual activities, it uses them as the basis for assigning costs to products and services. ABC method allocates overhead costs based on the main cost objects.