Final answer:
ABC is effective in process settings when it helps identify costs for specific activities, especially in adiabatic processes that simplify cost identification along an ACB path.
Step-by-step explanation:
Activity-based costing (ABC) can play an effective role in process settings provided it is used to identify and evaluate the costs associated with specific activities involved in producing a product or service. By tracking expenses through the processing steps, managers can determine the efficiency and profitability of different segments of the production process. Particularly when the ABC process occurs adiabatically, meaning without the exchange of heat or matter with the environment, it can simplify the identification of costs related to the AB change. This simplification is useful in a two-step process that follows a path described by ACB, helping to break down complex processes into more manageable and analyzable steps.