Products S5 and CP8 each are assigned $50.00 in indirect costs by a traditional costing system. An activity analysis revealed that although production requirements are identical, S5 requires 45 minutes less setup time than CP8.

Compared to an activity-based cost system, CP8 is ________ under the traditional system.

A) undercosted

B) overcosted

C) fairly costed

D) accurately costed

E) costed the same

According to an ABC system, S5 uses a disproportionately

A) smaller amount of unit-level costs.

B) larger amount of unit-level costs.

C) smaller amount of product-sustaining costs.

D) larger amount of batch-level costs.

E) smaller amount of batch-level costs.

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1 Correct Option A undercosted Undercoating is popular beca... View the full answer