non-manufacturing costs as

a proportion of total product cost?

manufacturing overhead costs as a proportion of

total manufacturing costs?

A company manufactures three models

of office chairs – a basic, a moderate, and a complex model. The company has

switched from a traditional costing system to an activity-based costing (ABC) system

and has re-costed its products using ABC. Which of the following statements are

true?

There will be a decrease in

the direct material costs assigned to the office chairs

There will be a change to the

manufacturing overhead costs assigned to the office chairs.

There will be no change to

total product costs. 

There will be no change to non-manufacturing costs assigned to the

office chairs.