The use of unit-related measures to assign overhead costs is more likely to:
A)undercost high-volume products.
B)undercost specialty low-volume products.
C)undercost complex products.
D)undercost specialty low-volume and complex products.

Question

Quizplus · Accepted Answer

Unit-related measures, such as direct labor hours or machine hours, are typically better suited for assigning overhead costs to high-volume products with similar production processes. This approach may not accurately reflect the actual overhead costs incurred for specialty low-volume or complex products, resulting in undercosting. Therefore, the use of unit-related measures is more likely to undercost specialty low-volume and complex products.

The Use of Unit-Related Measures to Assign Overhead Costs Is