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A company manufactures an increasing variety of consumer communications devices. The company has always used...

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Accounting

A company manufactures an increasing variety of consumer communications devices. The company has always used a traditional cost allocation system, but now the accounting staff has proposed a change to an activity-based costing system.

The vice president of operations argues, Costs are costs, rearranging them wont save any money and those systems are complicated and expensive.

The most logical response to this argument is that activity-based costing systems

A. Provide more accurate reporting of each products cost so that management can make more informed pricing decision

B. Are less expensive to use than traditional cost systems.

C. Eliminate the use of arbitrary cost allocations that are used in traditional cost systems.

D. Focus on manufacturing activities and eliminate engineering, marketing, and other non-traceable activities from costing considerations.

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