Implementing activity based costing (ABC)has a direct impact on reducing overhead in an organization.

Question

Quizplus · Accepted Answer

Activity Based Costing (ABC) primarily provides more accurate cost allocation and insights into where overhead is incurred, rather than directly reducing overhead costs. It helps in identifying cost drivers and can lead to more informed decisions that may result in overhead reduction, but the implementation itself does not directly reduce overhead costs.

Implementing Activity Based Costing (ABC)has a Direct Impact on Reducing