Using Non-Volume-Based Activity Drivers Allows Activity-Based Costing To

question 43

Multiple Choice

Using non-volume-based activity drivers allows activity-based costing to:

• A)assign more indirect costs to products whose production volume is higher.
• B)assign more direct costs to products whose production volume is higher.
• C)assign more indirect costs to products whose complexity is higher.
• D)assign more direct costs to products whose complexity is higher.

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Definitions:

Wage Rate

The amount of money paid to an employee per unit of time, such as an hour or a year.

Economic Pie

A metaphorical representation of the total amount of wealth or resources available in an economy that can be divided among its participants.

Dollar Value

The worth or purchasing power of one United States dollar in terms of goods or services.

Goods and Services

The products (goods) and activities (services) that are produced and sold to satisfy human wants and needs.