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deaxribe rhe characteristics of products which would auggest it would be better to use ABC as...

deaxribe rhe characteristics of products which would auggest it would be better to use ABC as an indirect coat allocation method over a teaditional method such as direct labor hours

describe the characteristics of products which would suggest ot would be better to use ABC as an indirect cost allocation method over a traditional method such as direct labor hours
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Answer #1

ABC Costing can be used for products with the following Characteristics:

1. Process of Manufacturing should be activity oreiented

2. Proper Identification of Overhead Costs to Activities.

3. Where Allocation of Overheads on Blanket Rates based on a factor for the entire factory seems unsound when more than one products getting produced and there is alot of difference in actual consumption patters

4. Identification and Attributing the Cost Drivers to the Products

Happy Learning and All The Best

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