Ethical behaviour is essential if a management team is to develop a trusting relationship that can be counted on when tough decisions have to be made. The use of activity-based costing does not seem to create many areas where unethical behaviour can make a difference. However, like any other management activity, it is prone to misuse and favourable treatment for one group over another.
Required:
Comment on how activity-based costing can distort the numbers within an organization and how some managers may be disadvantaged as a result.