Overheads are transferred from the high-volume product The Boot to the low-volume product Club. Allocating overhead in ABC usually results in higher unit prices for lower volume products.
When activity-based costing is used, traditional costing systems assign product-level costs to all products using direct labor hours or other relevant Cost shifts from high-volume products to low-volume products. volume.
The cost flow is the same as in activity-based costing systems with one exception. Instead of using factory-wide overhead rates to allocate or apply overhead to products, the ABC system uses multiple overhead rates to allocate overhead. Activity-Based Costing ABC allocates manufacturing overheads to products in a more logical way than the traditional approach of simply allocating costs based on machine hours.
Learn more about Overhead Costs here:-https://brainly.com/question/13963007
#SPJ9
