Which of the following is most likely to be true of the manufacturing overhead costs assigned to a product with relatively low volume and high complexity?
A)An ABC system will assign more manufacturing overhead costs to the product than a volume-based system.
B)A volume-based system will assign more manufacturing overhead costs to the product than an ABC system.
C)An ABC system will assign the same manufacturing overhead costs to the product as a volume-based system.
D)An ABC system will assign manufacturing overhead costs to the product,while a volume-based system will not.

Question

Quizplus · Accepted Answer

A product with relatively low volume and high complexity will likely have higher overhead costs, which can be better allocated using an ABC system that considers the specific activities and resources required for production. A volume-based system is more likely to allocate costs based solely on the volume of production, which may not accurately reflect the actual costs associated with the product. Therefore, an ABC system will assign more manufacturing overhead costs to the product than a volume-based system.

Which of the Following Is Most Likely to Be True