ABC allocates overhead costs to products based on input measures rather than output measures.

Name: ABC allocates overhead costs to products based on input measures rather than output measures.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This is true. Activity-based costing (ABC) allocates overhead costs based on input measures like machine hours or labor hours, rather than just output measures like direct labor hours or units produced. This allows for a more accurate allocation of costs to products based on the resources they actually consume.

ABC Allocates Overhead Costs to Products Based on Input Measures