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    Activity-Based Costing: Product characteristics

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    Describe the characteristics of products which would suggest it would be better to use ABC as an indirect cost allocation method over a traditional method such as direct labor hours.

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    Solution Preview

    Activity based costing (ABC) is a costing method which utilizes multiple basis in apportioning costs to a service or product. Cost apportionment is a major requirement when computing the total cost of a product or service.

    The following ...

    Solution Summary

    The solution set details the characteristics which would make ABC cost apportionment more favourable than the traditional method.