Question

LO 6.4Activity-based costing systems:

use a single predetermined overhead rate based on machine hours instead of on direct labor
frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product
limit the number of cost pools
always result in an increase of at least one product’s selling price

Answer 1

frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product

Step-by-step explanation:

As we move from a single rate system into a different method with several cost pool and cost driver the amount of overhead allocated on each product will be different thus, one product will take more overhead while other product overhead amount will decrease.