In order to obtain more accurate product costs, how do many companies allocate overhead?

Question

Quizplus · Accepted Answer

Many companies use activity-based costing (ABC) to allocate overhead costs. ABC is a method of assigning costs to products and services based on their use of activities. This method provides a more accurate picture of the cost of producing each product by identifying the specific activities that contribute to the cost of production. This allows companies to better understand the causes of their costs and make more informed decisions about pricing, product mix, and process improvement.

In Order to Obtain More Accurate Product Costs, How Do