Question: In planning variable overhead costs, managers must focus attention on activities that create a superior product or service and eliminate activities that do not add

 In planning variable overhead costs, managers must focus attention on activities

In planning variable overhead costs, managers must focus attention on activities that create a superior product or service and eliminate activities that do not add value. Effective planning for fixed overhead costs is similar to planning for variable overhead costs-focusing on eliminating the non-value-added costs. An additional strategic issue for managers in fixed costs is choosing the appropriate level of capacity that will benefit the company in the long run. What is meant by "appropriate levels of capacity?" Give examples

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