Requirement 4. What value, if any, would

MFQ

get by allocating costs of each department based on the activities done in that department? (Select three benefits of the ABC system.)

A.

For the long term, activity-based costing can assist management in making decisions regarding the viability of product lines, distribution channels, marketing strategies, etc.

B.

There is no value to allocating costs of each department based on activities done in that department. Costs will always be lower when using the simple costing method.

C.

Managers can better allocate costs due to identifiying cost drivers.

D.

The system will assist in price setting that more accurately reflect the cost of the product.

E.

When allocating the costs of each department based on the activities done in that department, only the direct costs are allocated and these costs are more easily identified.

F.

Managers can allocate overhead costs broadly in an easy, inexpensive, and reasonably accurate way.