A company may need to transition from a traditional or hybrid based costing systems to an activity-based costing system if:

a)Output unit-level costs represent the majority of the overall MOH costs.

b)Product-sustaining costs and facility sustaining costs represent the majority of the overall MOH costs.

c)MOH costs are minimal in relation to direct costs.

d)Batch level costs and facility sustaining costs are high yet MOH costs are minimal in relation to direct costs.

e)More information is needed.