Managing and sustaining product diversity requires many more overhead resources such as production schedulers and product design engineers than managing and sustaining a single product. The costs of these resources can be accurately allocated to products on the basis of direct labour-hours

Question

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The costs of overhead resources like production schedulers and product design engineers are not directly related to direct labor-hours, making it inaccurate to allocate these costs based solely on labor hours. These are considered indirect costs and often require more sophisticated allocation methods based on activity-based costing or other overhead allocation strategies that better reflect the use of resources by different products.

Managing and Sustaining Product Diversity Requires Many More Overhead Resources