When activity-based costing is used, the estimated total factory overhead cost for a product is the sum of the product's individual activity allocations.

Question

Quizplus · Accepted Answer

Activity-based costing assigns factory overhead costs to products based on the activities required to produce each product, summing the costs of individual activities to get the total estimated overhead cost for the product.

When Activity-Based Costing Is Used, the Estimated Total Factory Overhead