Reference no: EM132667414

Problem 1: There are two approaches to allocate overhead to products, traditional and activity based costing. In comparison with a traditional system that uses a single, volume-based cost driver, an activity-based costing system is preferred when a company has:

Select one:

a. a large proportion of nonunit-level activities.

b. a large proportion of nonunit-level activities and product-line diversity

c. existing variances from budgeted amounts.

d. product-line diversity.

e. minimal product-line diversity and a small proportion of nonunit-level activities.