The Use of Unit-Based Activity Drivers to Assign Costs Can

question 170

Multiple Choice

The use of unit-based activity drivers to assign costs can result in significant cost distortions only if:

• A)overhead costs are a small percentage of total manufacturing costs.
• B)direct material costs are a significant percentage of total manufacturing costs.
• C)overhead costs are a significant percentage of total manufacturing costs.
• D)direct material costs are a small percentage of total manufacturing costs.

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Definitions:

Nomothetic

An approach in psychology focused on studying and identifying general laws that apply to all individuals, as opposed to idiographic methods which highlight individual differences.

Monotheistic

Relating to or characterized by the belief in the existence of only one god.

Personality Trait

Enduring characteristics or qualities that define an individual's behavior and attitude.

Personality State

Temporary behaviors or feelings that can change depending on the situation, distinct from longer-term personality traits.