Explain why activity-based costing would benefit the company


Problem:

Minor Medical Company is a manufacturer of blood pressure monitors, catheters, surgical instruments, and other medical products. In each of the past five years, Minor has added approximately 10 new products to its sales. Although its product line has become more diversified and its manufacturing process more complex, Minor continues to apply overhead costs using a single activity base -- direct labor hours.

Explain why activity-based costing would benefit this company.

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Accounting Basics: Explain why activity-based costing would benefit the company
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