Each of the following is a limitation of activity-based costing except that it decreases control over overhead costs. some arbitrary allocations continue. it can be expensive to use. it is complex and can be difficult to understand.

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22-07-2022
Business

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Each of the following is a limitation of activity-based costing except that it decreases control over overhead costs. some arbitrary allocations continue. it can be expensive to use. it is complex and can be difficult to understand.

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pragyavermav1 pragyavermav1 · Answer 1 · 2022-07-30T15:03:30+02:00

Each of the following is a limitation of activity-based costing except that B) some arbitrary allocations continue.

Activity-based costing is an overhead cost allocation system that allocates overhead to multiple activity cost pools and assigns the activity cost pools to products or services by means of cost drivers that represent the activities use.

It has its limitations:

Some arbitrary allocations continue.
It can be expensive to use
It is a fairly complex system and difficult to understand.

Activity-based costing is a costing approach that identifies sports in a business enterprise and assigns the fee of each pastime to all services and products consistent with the real consumption by way of each. consequently, this version assigns greater oblique charges to direct expenses in comparison to traditional costing.

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