Under activity-based costing, selling and administrative costs should be allocated to products if they are incurred to provide resources that are consumed by unit-level, batch-level, or product-level activities.

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Under activity-based costing, selling and administrative costs should be allocated to products if they are incurred to provide resources that are consumed by unit-level, batch-level, or product-level activities. This is because under ABC, costs are traced to the activities that cause them, and then allocated to the products that consume those activities. Therefore, if selling and administrative costs are incurred to support these activities, they should be allocated to the products that use them.

Under Activity-Based Costing, Selling and Administrative Costs Should Be Allocated