As managers seek more accurate product costing, overhead application solely on the basis of direct-labour hours or direct-labour cost is certain to

Question

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Overhead application based solely on direct-labour hours or cost is becoming less popular because these methods do not accurately reflect the resources consumed by products. More sophisticated methods such as activity-based costing (ABC) or direct costing have been developed to provide a more accurate view of product costs.

As Managers Seek More Accurate Product Costing, Overhead Application Solely