Which of the following are typical problems of traditional costing approaches (as compared to Activity-Based Costing)?
A) Under-costing of low-volume, high-complexity products
B) Under-costing of high-volume, low-complexity products
C) Under-producing unprofitable products
D) Over-producing profitable products
E) None of the above

Question

Quizplus · Accepted Answer

Traditional costing methods often allocate overhead costs based on a single volume measure, such as direct labor hours, which can lead to under-costing of low-volume, high-complexity products because they consume more resources than the allocation base reflects.

Which of the Following Are Typical Problems of Traditional Costing