Underlying costing view of activity-based costing: a note

Underlying costing view of activity-based costing - four points:

1. Fixed overhead cost is variable in the long run.

2. Activities can be conceived as operational routine for cost management purpose.

3. Cost allocation of overhead can be treated as if it is a cost tracing exercise.

4. In case 1-3 are not realistic, consider to apply the ABC cost hierarchy concept.