A Company Using a Volume-Based Overhead Assignment (Allocation) Method Will

Multiple Choice

A company using a volume-based overhead assignment (allocation) method will tend to:

A) Overstate the cost of low volume products.
B) Understate the cost of low volume products.
C) Understate the cost of high volume products.
D) Understate the cost of all products.
E) Either understate or overstate the cost of high volume products depending on the specific manufacturing factors involved.