Which of the following statements is(are)true?
A) Activity-based costs per unit are always greater than volume-based costs per unit.
B) Volume-based costing has typically resulted in lower gross margins for high volume products and higher gross margins for low volume products.
C) Different cost allocation methods are constructed so that they typically result in the same or similar estimates of how much it costs to make a product.
D) Activity-based costing typically provides less information about product costs while requiring more recordkeeping.

Question

Quizplus · Accepted Answer

Volume-based costing often allocates overhead costs based on a single measure like machine hours, which can lead to under-costing high volume products and over-costing low volume products, affecting gross margins.

Which of the Following Statements Is(are)true