14. Assume that a company produces two products in a manufacturing plant. One is a low volume specialty product that is produced on a demand pull basis, while the other is a high volume product that is produced on a push basis for inventory. A production volume based cost allocation system would tend to
a. Accurately reflect the product cost of the two products.
B. Overstate the product cost of the low volume product.
c. Understate the product cost of the low volume product.
c.Understate the product cost of the low volume product.
15. In the situation stated in the question above, the company’s net income based on a productionvolume based system will tend to be ________ relative to net income based on an activity based costing system.
c. Overstated for the low volume product and understated for the high volume product.