Conventional product costing systems used where product diversity has increased, cost structures have become more overhead-intensive and a higher proportion of overhead costs are fixed costs can result in:

Select one:

overstating the cost of high-volume, relatively simple product lines and understating the costs of low-volume, speciality product lines.

understating the cost of high-volume, relatively simple product lines and overstating the costs of low-volume, speciality product lines.

understating the cost of both high-volume and low-volume product lines.

overstating the cost of both high-volume and low-volume product lines.