Overhead allocation differs between traditional approaches and ABC primarily by:?
A.The number of overhead accounts used.
B.The number of cost pools used.
C.The number of cost drivers used.
D.The number of products produced.
E.The number of products sold.
Answers:
C.The number of cost drivers used.
The traditional method determines the cost allocation using direct labor dollars merely, so a product next to lofty direct labor dollars get allocated more of the overhead costs than a product next to low direct labor dollars. The number of information, setups, or test the product if truth be told uses does not impact the allocation of overhead costs when direct labor dollars are used to allocate overhead.
ABC provides a route to allocate costs more accurately when overhead costs are not incurred at like peas in a pod rate as direct labor dollars. The more events identified, the more complex the costing system become.
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B.The number of cost pools used.
C.The number of cost drivers used.
D.The number of products produced.
E.The number of products sold.
Answers:
C.The number of cost drivers used.
The traditional method determines the cost allocation using direct labor dollars merely, so a product next to lofty direct labor dollars get allocated more of the overhead costs than a product next to low direct labor dollars. The number of information, setups, or test the product if truth be told uses does not impact the allocation of overhead costs when direct labor dollars are used to allocate overhead.
ABC provides a route to allocate costs more accurately when overhead costs are not incurred at like peas in a pod rate as direct labor dollars. The more events identified, the more complex the costing system become.