When a Company Changes from a Traditional Costing System to an Activity-Based

question 106

True/False

When a company changes from a traditional costing system to an activity-based costing system, the unit product costs of low-volume products typically increase more than the unit product costs of high-volume products decrease.

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Definitions:

Origins

The starting point, cause, or source of something.

Destinations

The end points or targets to which something is directed or sent.

Routes

Paths or courses determined for the transportation of goods or people from one location to another.

Distribution Network

The interconnected group of storage facilities and transportation systems that a company uses to get products from the manufacturer to the end consumer.