Describing activity-based costing

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Reference no: EM1347247

1. What has happened in recent industrial history to reduce the usefulness of direct labor as the primary basis for allocating overhead to products?

2. In an automated manufacturing environment, what basis of overhead allocation is frequently more relevant than direct labor hours?

3. What is generally true regarding overhead allocation to high-volume products versus low-volume products under the traditional costing system?

4. What are the principal differences between activity-based costing (ABC) and traditional product costing?

5. What assumptions must be met for ABC costing to be useful?

Reference no: EM1347247

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