In companies where there is good reason to change from a traditionally-based costing system to an activity-based costing system, management might expect:
A)Products or services with high volumes will have higher overhead costs.
B)Products or services with high volumes will have lowered overhead costs.
C)Products or services with low volumes will have lowered overhead costs.
D)Products or services with high volumes are generally costed accurately.

Question

Quizplus · Accepted Answer

Activity-based costing often reallocates overhead costs more accurately, leading to high-volume products or services having lowered overhead costs compared to traditional costing methods.

In Companies Where There Is Good Reason to Change from a Traditionally-Based