Determining activity-based costing system

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Reference no: EM1347199

Give five disadvantages to using an activity-based costing system:

1. The company may be making single or few products,

2. The company may have low overhead costs as compared to direct labor,

3. The company may only have simple data available,

4. The company may have less non-product costs, and finally

5. The system may be too costly to install and/or execute

Based on these answers, why would a company who only makes a few products not want to use such a system? Is this kind of process more important to a company such as Ford or Boeing, who have several product lines and need to keep track of multiple lines of production?

Reference no: EM1347199

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