Overhead Allocation Based Solely on a Measure of Volume Such

question 77

Multiple Choice

Overhead allocation based solely on a measure of volume such as direct labor-hours:

• A) is a key aspect of the activity-based costing model.
• B) will systematically overcost high-volume products and undercost low-volume products.
• C) will systematically overcost low-volume products and undercost high-volume products.
• D) must be used for external financial reporting.

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