Overhead allocation based solely on a measure of volume such as direct labor-hours:   A. is a key aspect of the activity-based costing B. will systematically overcost high-volume products and undercost low-volume products. C. will systematically overcost low-volume products and undercost high-volume D. must be used for external financial reporting.

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.