Managing and sustaining product diversity requires many more overhead resources such as production schedulers and product design engineers than managing and sustaining a single product. The costs of these resources can be accurately allocated to products using activity-based costing than traditional costing which is based entirely on direct labor-hours.

Question

Princess Clay

Social Studies

14 April, 05:56

Managing and sustaining product diversity requires many more overhead resources such as production schedulers and product design engineers than managing and sustaining a single product. The costs of these resources can be accurately allocated to products using activity-based costing than traditional costing which is based entirely on direct labor-hours.

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Answers (1)

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Hailie Bright · Answer 1

This statement is false.

Explanation:

Overhead allocation is used to distribute resources indirect costs to revenue-producing projects. You can calculate overhead allocation by adding indirect labor and expenses. Thus, you can not just use activity-based costing to calculate overhead allocation.