When a Company Shifts from a Traditional Cost System in Which

question 45

True/False

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

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Definitions:

Clan System

A social structure used to organize families into larger groups sharing common ancestry and cultural traditions.

Ambilineal Descent

A form of descent in which individuals may inherit some family traits, affiliations, or belongings through either the maternal or paternal line, as selected by the individual, group, or society.

Bilateral Descent

A system of family lineage in which kinship and inheritance are traced through both parents' lines.

Double Descent

A system of kinship where individuals trace their ancestry through both their mother's and father's lines equally.