Magnolia Industries combines all manufacturing overhead into a single cost pool and allocates this overhead to products by using machine hours. Activity-based costing would likely show that with Magnolia's current procedures that:
A. the company's low-volume products are overcosted.
B. all of the company's products are overcosted.
C. all of the company's products are undercosted.
D. the company's high-volume products are undercosted.
E. the company's high-volume products are overcosted.
Answer: E
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