Question
Usually, traditional costing Blank______ high-volume products and Blank______ low-volume products.
Multiple choice question.
undercosts; overcosts
overcosts; undercosts
Multiple choice question.
undercosts; overcosts
overcosts; undercosts
Answers
GPT-4o mini
The correct answer is: **overcosts; undercosts**.
Traditional costing methods tend to allocate more overhead costs to high-volume products than what they actually consume, leading to overcosting those products. Conversely, low-volume products often absorb less overhead, resulting in undercosting.
Traditional costing methods tend to allocate more overhead costs to high-volume products than what they actually consume, leading to overcosting those products. Conversely, low-volume products often absorb less overhead, resulting in undercosting.