Jackson Company Manufactures Products X and Y, Applying Overhead on the Basis

Multiple Choice

Jackson Company manufactures products X and Y, applying overhead on the basis of labour hours. X, a low-volume product, requires a variety of complex manufacturing procedures. Y, on the other hand, is both a high-volume product and relatively simplistic in nature. What would an activity-based costing system likely disclose about products X and Y as a result of Jackson's current accounting procedures? $\begin{array} { | l | l | l | } \hline & { \underline { X } } & { \underline { Y } } \\\hline 1 & \text { Undercosted } & \text { Undercosted } \\\hline 2 & \text { Undercosted } & \text { Overcosted } \\\hline 3 & \text { Overcosted } & \text { Undercosied } \\\hline 4 & \text { Overcosted } & \text { Overcosted } \\\hline 5 & \text { Costed correctly } & \text { Costed correctly } \\\hline\end{array}$

A) 1.
B) 2.
C) 3.
D) 4.
E) 5.