Which of the following statements is true? Volume-based costing has typically resulted in lower gross margins for high...
Which of the following statements is true?
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Volume-based costing has typically resulted in lower gross margins for high-volume products and higher gross margins for low-volume products.
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Different cost allocation methods are constructed so that they typically result in the same or similar estimates of how much it costs to make a product.
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Activity-based costing typically provides less information about product costs while requiring more recordkeeping.
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Activity-based costs per unit are always greater than volume-based costs per unit.
Homework Answers
Solution:
Volume-based costing has typically resulted in lower gross margins for high-volume products and higher gross margins for low-volume products. This statement is true.
This is so because high volume products will be applied with higher costs which will result in lower gross margins and vice versa.
Hence first option is correct.
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Which of the following statements is true? Volume-based costing has typically resulted in lower gross margins for high...
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