When switching from a traditional costing system to an activity-based costing system that contains some batch-level costs:
A) the unit product costs of both high and low volume products typically increase.
B) the unit product costs of both high and low volume products typically decrease.
C) the unit product costs of high volume products typically increase and the unit product costs of low volume products typically decrease.
D) the unit product costs of high volume products typically decrease and the unit product costs of low volume products typically increase.

Question

Quizplus · Accepted Answer

In activity-based costing, batch-level costs are allocated more accurately based on actual activities. High volume products benefit from economies of scale, leading to decreased unit costs, while low volume products bear a higher share of batch-level costs, increasing their unit costs.

When Switching from a Traditional Costing System to an Activity-Based