Subject = Managerial Accounting

ABC = Activity Based Costing

1.) Which of the following statements is true?

A.) ABC allocates overhead based on a product's usage of resources.

B.) ABC is always a better way to find product costs than other methods.

C.) There should be 3 activity pools for ABC.

2.) Please select all of the answers that are considered disadvantages of ABC:

A.) Cost to implement ABC

B.) Cost Distortion can still exist, even with ABC

C.) ABC can provide more accurate overhead cost allocation