Overhead costs such as factory rent and supervisory salaries are allocated to cost objects in a multi-product facility.

Question

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Overhead costs such as factory rent and supervisory salaries need to be allocated to different cost objects, such as different products or departments, in order to determine their true costs and profitability. This is typically done using allocation methods such as activity-based costing or traditional cost allocation methods based on direct labor hours or machine hours.

Overhead Costs Such as Factory Rent and Supervisory Salaries Are