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    Traditional methods of allocating overhead

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    Briefly explain how traditional methods of allocating overhead to products might under-allocate costs to low-production volume products.

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    https://brainmass.com/business/accounting/traditional-methods-allocating-overhead-costs-473108

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    Briefly explain how traditional methods of allocating overhead to products might underallocate costs to low production-volume products.

    Under this method, the costs are allocated as per the volume or machine hours. As per ehow.com: "The method operates under the principle that indirect ...

    Solution Summary

    This solution explains how traditional methods of allocating overhead costs to products might result in the under-allocation of costs to low-production volume products.

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