In recent years, why has labor become such a small part of product costs and how can its use in overhead allocation perpetrate errors in decision-making?

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 6DQ: Overhead costs are the source of product cost distortions. Do you agree or disagree? Explain.
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In recent years, why has labor become such a small part of product costs and how can its use in overhead allocation perpetrate errors in decision-making?

 

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