Which of the Following Is Not True of Activity Cost

question 104

Multiple Choice

Which of the following is not true of activity cost drivers?

• A)They are measures of the underlying activity that occurs in each activity cost pool.
• B)They ideally have a cause and effect relationship with underlying activities.
• C)They are strictly volume-based allocation measures.
• D)They are used in Stage 2 cost allocations.

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Definitions:

Strategy

A high-level plan to achieve one or more goals under conditions of uncertainty.

Strategic Business Unit Level

A semi-autonomous division or unit of a company that has its own strategy and direction while contributing to the overall success of the corporation.

Nonprofit Organization

An entity that operates for purposes other than making a profit, often focused on social, charitable, or community goals.

Charitable Service Agency

Nonprofit organizations that provide assistance, services, or funds to those in need or pursue philanthropic missions.