Volume-based costing allocates indirect product costs based on the volume of output, using such allocation bases as direct labor hours, machine hours, or the amount of direct material used in the production process. Activity-based costing (ABC) has consistently shown that Volume-based costing ___________ the cost of high volume products and ______________ the cost of low volume products.

	High Volume Products	Low Volume Products
A.	Overstates	Overstates
B.	Overstates	Understates
C.	Understates	Overstates
D.	Understates	Understates

Option A

Option B

Option C

Option D