Group of answer choices remain constant and simply be spread
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
If activity-based costing is implemented in an organization without any other changes being implemented, total overhead costs will
Group of answer choices
remain constant and simply be spread over products differently.
be increased because of the need for additional people to gather information on cost drivers and cost pools.
be reduced because organizational costs will not be assigned to products or services.
be reduced because of the elimination of non-value-added activities.
Expert Solution
Step 1
Activity based costing refers to the concept of assigning the desired direct as well as indirect expenses to the desired products or services. Such method is based on activities involves in the production of products or services.
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