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ABC and variable costs.

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › ABC and variable costs.

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
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  • February 17, 2018 at 1:40 am #437684
    myacca1990
    Participant
    • Topics: 153
    • Replies: 164
    • ☆☆☆

    “ABC is of less benefit if the majority of the costs suffered by an organisation
    are variable costs.”
    How is the above statement correct?
    So i guess that means the fixed overheads are let,s say $15000 and they are driven by different cost drivers.So ABC is for allocating the fixed overhead costs not the variable costs?Are not the cost drivers variable in nature?

    February 17, 2018 at 12:15 pm #437746
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54679
    • ☆☆☆☆☆

    ABC is trying to absorb the fixed overheads in the ‘fairest’ way.

    Variable costs are, by definition, varying on a per unit basis already.

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  • The topic ‘ABC and variable costs.’ is closed to new replies.

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