Overhead costs are allocated to products to • eliminate the problems caused by delays in ob¬ taining actual cost data.
• make the overhead allocation process more ef¬ fective.
• allocate a uniform amount of overhead to goods or services based on related production efforts.
• allow managers to be more aware of individual product or product line profitability as well as the profitability of doing business with a partic¬ ular customer or vendor.LO.1