If a Costing System Uses a Single Base to Allocate

Multiple Choice

If a costing system uses a single base to allocate overhead costs that are results of several production activities:

A) Products that use relatively more of this base tend to be undercosted.
B) Products that use relatively less of this base tend to be overcosted.
C) Products that use relatively more of this base tend to be overcosted.
D) Products may be over- or under-costed, depending on the activity level.
E) Products may be over- or under-costed, depending on the overhead rate.