Activity-Based Costing (ABC) provides more accurate costs by reducing the cost distortions inherent in traditional methods, but the costs and complexity associated with its implementation have been identified as the most significant challenges. In this study, we raise and analyze one issue that is critically important both academically and practically as a challenge that ABC must overcome to provide accurate costs. Typically, ABC has a two-stage allocation structure in which consumed resources are first assigned to activities using resource cost drivers, and then the cost of each activity is allocated to individual products using activity cost drivers. In this process, the traditional distinction between support departments and production departments disappears, and the costs of all activities are directly allocated to products. This approach works properly when the consumption structure between each activity and product is clear and the amount of activity consumed by each product can be directly measured. However, in many cases, organizational activities take on a very complex multi-stage structure, and it has been reported that finding direct consumption relationships between the various activities performed in an organization and the final products is virtually impossible. In such situations, the typical two-stage ABC cannot be used. Nevertheless, the importance of this problem has often been overlooked, and in practice, a flawed approach called "bottom-up (expanded) ABC" has been employed. This study identifies the serious cost distortions and cost management problems caused by the "expanded ABC" commonly used in practice through an analysis of multi-stage resource consumption structures. Furthermore, it proposes "top-down ABC" as a new alternative and explores its applicability.