What is a possible consequence of using broad averaging to calculate unit costs?
A. By ignoring the allocation of indirect costs to the cost objects, broad averaging can lead to product overcosting.
B. Broad averaging does not take into account variable cost components, and therefore, this method is unable to provide meaningful data when estimating costs across various levels of activity.
C. Broad averaging, which ignores actual average indirect cost rates, can lead to product overcosting or product undercosting.
D. By ignoring the variation in the consumption of resources by different cost objects, broad averaging can lead to inaccurate product costing.