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Dear sir, could you please help me to explain some idea of Activities base costing .1 ABC is not approciate when over head vary with time spent on production.2. When overhead is substain, ABC is little use.3. ABC is useful when variable cost is small.Thank you
ABC is most appropriate for the better absorbing of fixed overheads. So it is less appropriate when most of the overheads are variable (point 1) and is more appropriate when variable costs are small (point 3).
I do not understand what you mean by ‘sustain’ in point 2.
Sorry, I correct the wording “Substantial” in point 2, please consider it again.Thank you.
I do not know where you are quoting this from, but ABC is useful when overheads are substantial (it is less useful when they are not substantial).