Question

All of the following statements are correct EXCEPT:___________.

1. the objective of installing ABC in service firms is different than it is in a manufacturing firm
2. activity-based costing has been widely adopted in service industries
3. a larger proportion of overhead costs are company-wide costs in service industries
4. the general approach to identifying activities and activity cost pools is the same in a service company as in a manufacturing company

Answer 1

the objective of installing ABC in service firms is different than it is in a manufacturing firm

Step-by-step explanation:

When overhead is assigned properly in ABC, it will reduce the unit cost of the high-volume products.

The objective of installing ABC in service firms is not different from the objective of instslling it in a manufacturing company. The main objective is that inventory storage costs are lowered in just-in-time processing. ABC leads to enhanced control over the overhead costs