A Cost Driver

question 38

Multiple Choice

A cost driver:

• A)is the same as a fixed cost.
• B)is an activity that causes total costs to change.
• C)is the same as margin of safety.
• D)is a method of calculating mixed costs.

Analyze the impact of inventory errors on financial statements over multiple periods.

Understand the application and benefits of the retail inventory method.

Recognize the practical applications and limitations of the gross profit method for estimating inventory cost.

Grasp the effects of purchase transactions not recorded but included in physical inventory on financial statements.

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