Explain why the cost of excess capacity is not allocated to the cost objects in...
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Explain why the cost of excess capacity is not allocated to the cost objects in an ABC-model. Question 2 c (10%) A company has total annual activity costs in the activity group procurement of kr 2 400 000, of which 80.0% are fixed and 20.0% are considered being variable. The budgeted activity level reflects the handling of 640 purchase orders per year, but this is only 70% of the available capacity. What is the annual cost of the excess capacity?
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