Overhead allocation based solely on measure of volume

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Overhead allocation based solely on a measure of volume such as direct labor-hours or number of students will systematically overcost high-volume products and undercost low-volume products. In other words, a course with higher enrollment will apprear more costly than one with lower enrollment, even thought they use the same resource for same amount of time, such as a classroom.

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Reference no: EM131289297

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