It is more beneficial for a company with a _______ amount of manufacturing overhead and a...
It is more beneficial for a company with a _______ amount of manufacturing overhead and a __________ product line to use activity-based costing.
Group of answer choices
Large/Diverse
Small/Homogenous
Large/Homogenous
Small/Diverse
Homework Answers
| It is more beneficial for a company with a large amount of manufacturing overhead and a diverse product line to use activity-based costing. |
| When a company has diverse product lines, the products use different activities such as material handling, purchasing, engineering, setups, machining in different ratios. |
| In such cases activity-based costing helps in better allocation of overhead based on consumption ratios. The use of a single overhead rate for diverse product lines may lead to cost distortion. |
| Option A Large/Diverse is correct |
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It is more beneficial for a company with a _______ amount of
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