When overhead is properly assigned in ABC, it will usually decrease the unit cost of high-volume products.

Question

Quizplus · Accepted Answer

In Activity-Based Costing (ABC), overhead costs are allocated based on the actual activities that drive costs, rather than on a broad, volume-based measure. This method often reveals that high-volume products consume fewer resources per unit than previously thought, leading to a decrease in the assigned unit cost of these products.

When Overhead Is Properly Assigned in ABC, It Will Usually