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” ABC will be of limited benefit if the overhead costs are primarily volume related, or if the overhead represent a small proportion of the overall cost.”
-Could you explain how this statement is correct?
If overheads are mainly value related, then even if ABC was used, most of the overheads would be absorbed on the basis of units and so there would not be much point in bothering.
If overheads are small then again using ABC will not make much difference since ABC is only relevant to the overheads.
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