The basic principles and concepts for variable overhead costs and fixed overhead costs can be applied to ABC systems.

Question

Quizplus · Accepted Answer

The basic principles and concepts for variable overhead costs and fixed overhead costs can be applied to activity-based costing systems (ABC systems) as well as other costing systems. ABC systems aim to allocate indirect costs to activities that consume them, producing a more accurate and detailed cost analysis than traditional costing systems. The principles and concepts for variable and fixed overhead costs are relevant to ABC systems to ensure that indirect costs are allocated to activities based on their level of consumption, rather than simply divided evenly among products or departments.

The Basic Principles and Concepts for Variable Overhead Costs and Fixed