Question

An activity-based costing system ______. requires substantial resources provides benefits of improved accuracy that always outweigh the costs produces different numbers than a traditional system is costly to maintain

Answer 1

Answer:

1. Requires substantial resources.

2. produces different numbers than a traditional system.

3. Is costly to maintain.

Explanation:

Activity-based costing (ABC) system is a method of accounting assigns the total cost of activities such as manufacturing overhead costs and indirect costs necessary to produce a product or provide a service.

Basically, an activity-based costing (ABC) system is focused on the cost drivers associated with the respective activities, which are responsible for cost to be incurred. The cost drivers are activities such as direct labor, purchase order, machine use etc.

Hence, an activity-based costing system requires substantial resources, produces different numbers than a traditional system and is costly to maintain.