A company should consider using ABC if: (a) overhead costs constitute a small portion of total product
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A company should consider using ABC if:
(a) overhead costs constitute a small portion of total product costs.
(b) it has only a few product lines that require similar degrees of support services.
(c) direct labor constitutes a significant part of the total product cost and a high correlation exists between direct labor and changes in overhead costs.
(d) its product lines differ greatly in volume and manufacturing complexity.
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Related Book For 
Accounting Tools For Business Decision Making
ISBN: 9780470377857
3rd Edition
Authors: Paul D. Kimmel
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