One important reason that managers allocate overhead costs to products is to provide information for decision making.

Question

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Allocating overhead costs to products helps managers make informed decisions about pricing, production volume, product mix, and other important matters. By knowing how much it costs to produce each product, managers can make more accurate decisions about which products to prioritize, whether to adjust prices, and how much of each product to produce. Therefore, it is true that allocation of overhead costs serves as an important source of information for decision making.

One Important Reason That Managers Allocate Overhead Costs to Products