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Moving to activity-based costing tends to change the per-unit cost of low-volume products how?
AIt abolishes them
BIt postpones them
CIt duplicates them
DIt increases them
Answer & Solution
Correct answer: D. It increases them
1. Low-volume products consume batch and product level work out of proportion to their units.
2. ABC assigns unit-level, batch-level, product-level and factory-level costs separately.
3. That can increase the per-unit costs of the low-volume products.
4. The per-unit costs of the high-volume products fall to match.
_Source: OpenStax Principles of Accounting Volume 2, Managerial Accounting (CC BY-NC-SA 4.0), Ch 6 'Activity-Based, Variable, and Absorption Costing', sections 6.1-6.5_
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