When a Company Changes from a Traditional Cost System in Which

question 82

True/False

When a company changes from a traditional cost system in which manufacturing overhead is applied based on direct labor-hours to an activity-based costing system in which there are batch-level and product-level costs, the unit product costs of high-volume products typically increase whereas the unit product costs of low-volume products typically decrease.

Comprehend the principles behind sensory adaptation and its impact on perception.

Appreciate the role of learned and cultural associations in preferences for smells and tastes.

Understand the concept of embodied cognition and its impact on thoughts and attitudes.

Understand the structure and function of the vestibular system in maintaining balance.

---

Definitions:

Common Fixed Expenses

Expenses that do not vary with production or sales levels, shared across multiple products, departments, or segments of a business.

Operating Period

The amount of time a business or a part of it operates within a specific timeframe, typically a fiscal year or quarter.

Variable Costing

An accounting method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of goods sold.

Absorption Costing

A system of accounting that encompasses the full range of manufacturing costs—direct materials, direct labor, and overheads both variable and fixed, within the cost framework of a product.