Which of the following statements is 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 volume measure, which can lead to under-costing high-volume products and over-costing low-volume products, thus affecting gross margins as described.

Which of the Following Statements Is True