The use of a single indirect cost rate is more likely to
A)undercost high volume simple products.
B)undercost low volume complex products.
C)undercost lower priced products.
D)overcost higher priced products.
E)overcost low volume complex products.

Question

Quizplus · Accepted Answer

Using a single indirect cost rate means that all products are allocated the same rate, regardless of their volume or complexity. This can result in undercosting for low volume complex products, as they require more resources to manufacture but are being allocated the same rate as high volume simple products.

The Use of a Single Indirect Cost Rate Is More