All Other Things the Same, the Unit Product Costs of High

question 62

Multiple Choice

All other things the same, the unit product costs of high volume products will decrease and the unit product costs of low volume products will increase when switching from a traditional costing system to an activity-based costing system if:

• A)the activity-based costing system uses direct labor-hours as a measure of activity for at least one activity cost pool.
• B)the activity-based costing system includes at least one batch-level cost.
• C)the activity-based costing system includes at least one unit-level cost.
• D)the activity-based costing system uses machine-hours as a measure of activity for at least one activity cost pool.

Analyze the effect of overhead allocation on product costs and pricing strategies.

Evaluate the impact of manufacturing overhead costs on gross margin.

Recognize the role of capacity in determining overhead rates and its impact on product costing.

Apply overhead costs to products under both traditional and activity-based costing systems.

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Definitions:

Ethical Conflict

A situation where an individual faces a choice between different courses of action, which are informed by competing sets of moral values.

Ethical Dilemma

A situation in which a difficult choice has to be made between two or more alternatives, especially ones that are equally undesirable from an ethical or moral standpoint.

RADAR Model

A framework for recognizing, avoiding, detecting, and responding to ethical dilemmas and business risks.

Ethical Dilemma

A situation where an individual faces a choice between two or more morally correct but mutually exclusive actions, challenging their ethical principles.