Q - Describe four signs that help indicate when ABC systems are likely to provide the most benefits.;A - 1) Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity.;2) Products that a company is well suited to make and sell show small profits, whereas products that a company is less suited to produce and sell show large profits.;3) Operations staff have substantial disagreement with the reported costs of manufacturing and marketing products and services.;4) Significant amounts of indirect costs are allocated using only one or two cost pools.;Instructor?s Q - Why would the difference in profits for specific products be an indicator?
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