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

question 144

True/False

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.

---

Definitions:

Taxable Income

The amount of income used to determine how much the taxpayer owes in taxes, after deductions and exemptions.

Tax Freedom Day

The day of the year by which a nation as a whole has theoretically earned enough income to pay its taxes for the year.

1099 Forms

Tax documents used in the United States to report various types of income other than wages, salaries, and tips.

Federal Income Tax

A tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.