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)under-costed
B)fairly costed
C)over-costed
D)ignored

Question

Quizplus · Accepted Answer

Traditional costing systems often allocate overhead costs based on volume-related drivers, such as direct labor hours or machine hours, which can result in products manufactured in small batches being under-costed because they do not accurately capture the additional costs associated with small batch production.

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