Which of the following is a limitation of activity-based costing?

A) More cost bases.
B) Less control over overhead costs.
C) Poorer management decisions.
D) Some arbitrary allocations continue.

Activity-Based Costing

A method in accounting that assigns costs to products or services based on the activities required to produce or deliver them.

Overhead Costs

Indirect costs associated with operating a business, such as utilities, rent, and administrative expenses, not directly tied to a specific product or service.

Arbitrary Allocations

The distribution of costs based on criteria that may not precisely reflect the actual consumption or benefit of those costs.