Final answer:
The correct option is 4). Switching to activity-based costing would likely result in more overhead being allocated to the production of MRI machines due to their more complex and activity-intensive production process compared to x-ray machines.
Step-by-step explanation:
If a company that manufactures electronic components for x-ray machines and advanced digital MRI machines switched from the traditional overhead allocation system to an activity-based costing (ABC) system, the likely result would be: option 4) It would allocate more overhead to MRI machines, because their production probably requires more activities than the production of x-ray machines. Activity-based costing is designed to provide more accurate cost information by assigning overhead costs based on the actual activities that drive those costs. In this case, the complex, state-of-the-art technology used for MRI machines is likely to involve more labor-intensive and diverse activities compared to the standard technology used for x-ray machines. This switch to ABC would reflect these differences and would allocate overhead costs accordingly.
This understanding coincides with rational cost planning in production technology choices. For instance, if a firm's technology has high machine costs, one would expect a shift toward less capital and more labor. Likewise, if a technology has lower machine costs, this could incentivize more machinery use. In summary, firms select production technologies based on the lowest total cost given their respective inputs.