Question
A department of a company uses number of returns as its cost driver to allocate overhead costs. Question: A professional person has pointed out that
A department of a company uses number of returns as its cost driver to allocate overhead costs.
Question: A professional person has pointed out that it is probably not correct that every return requires the exactly the same amount of overhead resources.What are three factors that this company would want to consider before deciding whether or not to increase the accuracy of their cost system (by, for example, finding a better driver)?Be as specific as possible, and be clear how the factor would impact the decision to increase the accuracy or not.
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