Question

When a company changes from a traditional costing system to an activity based costing system, the unit product costs of high volume products typically change more than the unit product costs of low-volume products Select one True False

Answer 1

False..

Traditional costing adds an average overhead rate to the direct costs of manufacturing products and is best used when the overhead of a company is low compared to the direct costs of production. Activity-based costing identifies all of the specific overhead operations related to the manufacture of each product.

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