Question: ABC Company is considering implementing a new cost allocation method for its overhead costs. The company currently allocates overhead based on direct labor hours but

ABC Company is considering implementing a new cost allocation method for its overhead costs. The company currently allocates overhead based on direct labor hours but is considering switching to activity-based costing (ABC) to improve accuracy. Analyze and compare the overhead costs allocated under both methods, recommending whether the company should switch to ABC, providing detailed reasoning.

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