In Allocating Variable Costs to Products

question 98

Multiple Choice

In allocating variable costs to products,

• A)a volume-based cost driver should be used.
• B)direct labor hours should always be used as the allocation base.
• C)a company should use the same allocation base that it uses for fixed costs.
• D)a company should never use more than one cost driver.

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Definitions:

Withholding Labor

A tactic used by workers, such as in a strike, where they refuse to work in order to pressure employers to meet their demands.

Employer's Cost

The total expenses incurred by employers to compensate employees, including wages, benefits, taxes, and insurance.

Picket Line Misconduct

Unacceptable or illegal actions committed by individuals participating in a picket line, typically during a labor strike.

Criminal Prosecution

The process by which a person is formally charged with a crime by a governmental body and brought to trial.