So what do they really cost?

How Activity Based Costing differs from traditional systems.

When calculating unit costs, an attempt is made to include a fair share of all costs, including overheads. The problem with overheads is that they don’t behave in the way we’d like! Overheads are indirect costs, that is, they do not relate to particular units of output. They include things such as factory rent and machinery maintenance – costs that must be incurred in...

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