When a company changes from a traditional costing system to an activity-based costing system, the unit product costs of low-volume products typically increase more than the unit product costs of high-volume products decrease.

Question

Quizplus · Accepted Answer

This is because low-volume products require more activities and resources to produce, and therefore, the cost of those activities is spread over a smaller number of units, resulting in a higher unit product cost. On the other hand, high-volume products require fewer activities and resources to produce, and the cost of those activities can be spread over a larger number of units, resulting in a lower unit product cost.

When a Company Changes from a Traditional Costing System to an Activity-Based