Indicate whether each of the following statements is true or false.In an automated environment, use of a volume-based cost driver may undercost high-volume products. _____In an automated environment, an activity-based cost driver would provide for more accurate allocation of setup costs than would a volume-based cost driver. _____Activity-based costing is probably not cost beneficial for a company that makes very similar products. _____In an automated manufacturing environment, use of a volume-based cost driver could lead managers to make poor decisions. _____Activity-based costing always delivers significantly more accurate cost allocation than does volume-based costing. _____
What will be an ideal response?
In an automated environment, use of a volume-based cost driver may undercost high-volume products. F
In an automated environment, an activity-based cost driver would provide for more accurate allocation of setup costs than would a volume-based cost driver. T
Activity-based costing is probably not cost beneficial for a company that makes very similar products. T
In an automated manufacturing environment, use of a volume-based cost driver could lead managers to make poor decisions. T
Activity-based costing always delivers significantly more accurate cost allocation than does volume-based costing. F
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Indicate whether the statement is true or false