Question

question 8 (5 points)
listen
overhead allocation based solely on a measure of volume, such as direct - labor hours,
will systematically overcost low - volume products and undercost high - volume
products.
is a key aspect of the activity - based costing model.
must be used for external financial reporting.
will systematically overcost high - volume products and undercost low - volume
products.

Explanation:

Traditional overhead allocation using volume measures (e.g., direct-labor hours) assigns more overhead to high-volume products (since they use more volume-related resources) and less to low-volume ones. This leads to overcosting high-volume products (allocating too much overhead) and undercosting low-volume products (allocating too little). Activity-based costing, by contrast, uses multiple cost drivers, so volume-only allocation is not its key aspect. External reporting does not mandate volume-only allocation.

Answer:

will systematically overcost high-volume products and undercost low-volume products.