An effective plan for variable overhead costs will eliminate activities that do not add value.

Question

Quizplus · Accepted Answer

An effective plan for variable overhead costs, also known as activity-based costing or ABC, aims to identify and eliminate non-value-adding activities to reduce costs and increase efficiency. By focusing on activities that directly contribute to the production of goods or services, a company can allocate resources more effectively and improve profitability. Therefore, the statement is true that an effective plan for variable overhead costs will eliminate activities that do not add value.

An Effective Plan for Variable Overhead Costs Will Eliminate Activities