Describe How Assigning Overhead Costs Differs Under a Simple Activity-Based

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The Answer is Under a traditional volume-based system, a predetermined overhead rate based on direct labour hours or some other measure of volume is used to apply overhead to the product. Many manufacturers use direct labour hours assuming that they are closely related to the volume of activity in the factory.
Under a simple activity-based product costing system, overhead is applied in two steps. The first step is to identify significant activities and group costs by these activities into activity cost pools. The second step is to find an activity driver for each pool and apply the costs to products according to their relative use of the activity drivers.

Describe How Assigning Overhead Costs Differs Under a Simple Activity-Based

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Describe How Assigning Overhead Costs Differs Under a Simple Activity-Based

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Correct Answer:
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