ABC is significantly less costly to implement and maintain than more traditional overhead costing systems. A. True
B. False

B. False

Explanation:

Generally speaking, ABC costing is more exact and accurate than traditional costing, but it is also more expensive to implement and maintain. Traditional costing methods are much simpler, and therefore, they require less work. But one of the disadvantages of traditional costing is that it allocates overhead costs based on a predetermined overhead rate which is set up in an arbitrary manner. Even though ABC costing is more complex and accurate, it is not accepted by US GAAP. ABC costing is basically a useful information tool.

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