Which of the following statements regarding service companie

Which of the following statements regarding service companies and activity-based costing (ABC) is true?

a. Service companies are not permitted to use ABC costing.

b. Fewer repetitive activities make ABC costing more difficult to implement in service companies.

c. Service companies find it easier to use ABC costing than manufacturing companies.

d. Service companies have proportionately less facility-level costs than manufacturing companies.

Solution

Answer is option (b) Fewer repetitive activities make ABC costing more difficult to implement in service companies Incomparing implmenting activity based costing in manufactring Companies and Service companies , Implementation in Service based companies will be more difficult.because of in service based companies have a few reparative activites which makes it difficult to implement the ABC system in Service based companies