One of the Consequences of Traditional Methods of Overhead Allocation

question 38

Multiple Choice

One of the consequences of traditional methods of overhead allocation combined with cost-based pricing is that:

• A) low-volume products can be overpriced.
• B) high-volume products can be underpriced.
• C) simple products can be underpriced.
• D) high-volume products can be overpriced.

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Definitions:

Rounding Rules

Guidelines for rounding numerical values, often to a specified number of decimal places, to simplify reporting or calculation.

Rounded

The process of adjusting numbers to a specified degree of precision, often used to simplify data or match a required format.

Quotient

The outcome achieved when one amount is divided by another.

Rounded

This term refers to adjusting a number to its nearest integer or specified decimal place for simplicity or convenience.