All other things the same, the unit product costs of high volume products will decrease and the unit product costs of low volume products will increase when switching from a traditional costing system to an activity-based costing system if:
A)the activity-based costing system uses direct labor-hours as a measure of activity for at least one activity cost pool.
B)the activity-based costing system includes at least one batch-level cost.
C)the activity-based costing system includes at least one unit-level cost.
D)the activity-based costing system uses machine-hours as a measure of activity for at least one activity cost pool.

Question

Quizplus · Accepted Answer

Activity-based costing allocates costs more accurately based on actual activities, often revealing that high volume products were previously over-costed and low volume products under-costed, especially when batch-level costs are considered.

All Other Things the Same, the Unit Product Costs of High