When Using a Single Cost Driver to Allocate Overhead Costs

question 53

Multiple Choice

When using a single cost driver to allocate overhead costs, the amount of overhead costs that are applied is

• A)usually greater for low-volume products than for high-volume products.
• B)usually greater for high-volume products than for low-volume products.
• C)usually equal for both low and high-volume products.
• D)sometimes greater for higher-volume products, and sometimes greater for low-volume products.

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Definitions:

Opportunity Cost

The forfeiture of potential advantages from various alternatives upon choosing one.

Control Over

The authority or power to regulate, direct, or dominate a situation, process, or entity.

Technological Advances

Innovations and improvements in technology that increase productivity and potentially lead to economic growth and development.

Specialized Resources

Resources uniquely suited for a specific type of production or service, enhancing efficiency.