If substantial batch-level or product-level costs exist, then overhead allocation based on a measure of volume such as direct labor-hours alone: must be used for external financial reporting since activity-based costing cannot be used for external reporting purposes. will systematically overcost high-volume products and undercost low-volume products. will systematically overcost low-volume products and undercost high-volume products. is a key aspect of the activity-based costing model.

Explain whether each of the following events increases or decreases the money supply. a. the fed buys bonds in open-market operations. b. the fed reduces the reserve requirement. c. the fed increases the interest rate it pays on reserves. d. citibank repays a loan it had previously taken from the fed. e. after a rash of pickpocketing, people decide to hold less currency. f. fearful of bank runs, bankers decide to hold more excess reserves. g. the fomc increases its target for the federal funds rate.