Final answer:
In traditional cost systems, high-volume products tend to be overcosted, while custom, low-volume products are usually under-costed due to the simplistic approach of allocating overhead based on volume-based cost drivers that do not reflect the true cost consumption.
Step-by-step explanation:
When using a traditional cost system, standard, high-volume products are generally over-costed and custom, low-volume products are often under-costed. This effect occurs because traditional costing methods often allocate overhead costs based on a single volume-based cost driver, such as machine hours or direct labor hours, which does not account for the actual complexity and resource consumption of each product. High-volume products consume a high amount of these volume-based measures, leading to them being over-costed, whereas low-volume, custom products might take more resources in terms of design, special handling, or setup but don't consume as much of the volume-based measures, consequently being under-costed.