Question

Activity-based costing data blank______.

a) is well suited to decision making
b) only assigns relevant
c) costs can be easily misinterpreted

Answer 1

Activity-based costing (ABC) data is well suited to decision making and provides a more accurate allocation of costs to products or services compared to traditional costing methods. However, it can be misinterpreted if not understood properly.

Step-by-step explanation:

Activity-based costing (ABC) data is well suited to decision making, as it provides a more accurate allocation of costs to products or services compared to traditional costing methods. ABC assigns costs based on the activities that drive the costs, allowing for better cost control and more informed decision-making.

However, it is important to note that ABC data can sometimes be misinterpreted if not understood properly. It requires careful analysis to ensure that the costs are allocated correctly and are relevant to the decision at hand.