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Do we use it to absorb non-production overheads into each unit of product? or just do it on lump sum basis since it does not make a big difference ?
In ABC, non-production overheads are typically not absorbed into each unit of product in the same way as production costs.
ABC focuses on identifying the activities that drive costs and assigns overheads based on those activities.
This means that while some non-production overheads may be allocated to products, they are generally treated separately and not absorbed uniformly across all units.
Read the question to see what it states.
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