In changing from a traditional costing system to an activity-based costing system,overhead costs tend to shift from high-volume standard products to low-volume premium products because
A)All overhead costs are indirect.
B)Premium products usually consume more activities per
C)Standard products use more total activities than premium products.
D)None of these ans choices are correct.

Question

Quizplus · Accepted Answer

Activity-based costing allocates overhead costs based on the specific activities that consume resources, rather than allocating those costs uniformly across all products. Premium products usually require more specialized and customized activities, which would result in higher overhead costs under an activity-based costing system. Standard products may require fewer activities, and therefore have lower overhead costs.

In Changing from a Traditional Costing System to an Activity-Based