Overhead Allocation Based Solely on a Measure of Volume Such

Multiple Choice

Overhead allocation based solely on a measure of volume such as direct labor-hours:

A) is a key aspect of the activity-based costing model.
B) will systematically overcost high-volume products and undercost low-volume products.
C) will systematically overcost low-volume products and undercost high-volume products.
D) must be used for external financial reporting.