Activity-based costing is appropriate in an organiza¬ tion that has

• a large variety of products being produced and sold.

• products that can be customized to customer specifications.

• wide diversity in manufacturing needs for its products.

• a lack of commonality in overhead costs related to products.

• problems with its current overhead allocation system.

• been affected by significant changes in its busi¬ ness environment, including widespread adop¬ tion of new technologies.

LO.1