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Activity-based costing systems: Question 3 options: use a single predetermined overhead rate based on machine hours...

Activity-based costing systems:

Question 3 options:

use a single predetermined overhead rate based on machine hours instead of on direct labor

always result in an increase of at least one product’s selling price

limit the number of cost pools

frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product
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Answer #1
Activity-based costing systems frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product
The overhead allocated to low volume products can increase and the overhead allocated to high volume products can decrease under Activity-based costing systems.
Activity-based costing systems uses multiple overhead rates based on activity cost pool.
Activity-based costing systems does not limit the number of cost pools.
Option D is correct
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