Question

all of the following describe an abc system except a. abc systems may only be used by service companies. b. abc systems are used in both manufacturing and nonmanufacturing companies. c. abc systems can create more accurate product costs. d. abc systems are more complex and costly than traditional costing systems.

Explanation:

Activity-Based Costing (ABC) is a costing method applicable to both manufacturing and service (nonmanufacturing) companies, so it is not limited to only service companies. ABC provides more accurate product costs by allocating overhead based on activity drivers, and it is indeed more complex and costly than traditional costing systems due to its detailed activity tracking.

Answer:

A. ABC systems may only be used by service companies.