With traditional costing systems, products manufactured in small batches and in small annual volumes may be ________ because batch-related and product-sustaining costs are assigned using unit-related drivers.
A) overcosted
B) fairly costed
C) costed the same as in activity-based costing
D) undercosted
E) ignored

Question

Quizplus · Accepted Answer

With traditional costing systems, products manufactured in small batches and in small annual volumes may be undercosted because batch-related and product-sustaining costs are assigned using unit-related drivers. This means that the costs are spread over a smaller number of units, resulting in a higher per-unit cost.

With Traditional Costing Systems, Products Manufactured in Small Batches and in Small