Final answer:
The total cost of MOH is the same regardless of whether traditional costing or ABC is used to allocate.
Step-by-step explanation:
The total cost of MOH (Manufacturing Overhead) is the same regardless of whether traditional costing or Activity-Based Costing (ABC) is used to allocate. This is because MOH is a fixed cost that does not change based on the allocation method.
Fixed costs are expenses that remain constant, regardless of the production volume or activity level. They include items like rent, insurance, and salaries. Variable costs, on the other hand, fluctuate with the volume of production. Examples of variable costs in manufacturing include direct materials and direct labor.
In the context of traditional costing and ABC, MOH is a fixed cost and remains the same no matter how it is allocated. The difference lies in how the MOH cost is assigned to products or services based on the activity levels or usage of cost drivers.