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Give the disadvantages of Activity Based Costing (ABC)

Give the disadvantages of Activity Based Costing (ABC)

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Martin
i. It may not be possible to identify the cost drivers for each activity

ii. Some overheads are common to more than 1 activity and it may be difficult to identify the
cost driver to use

iii. It is difficult to operate the system where we have large number of O/H items

iv. It is expensive to operate especially where it is complex to identify a cost driver which is
appropriate.
marto answered the question on March 4, 2019 at 06:14

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