Which of the Following Is True Concerning Cost Drivers for the Predetermined

question 1

Multiple Choice

Which of the following is true concerning cost drivers for the predetermined overhead rate in a process-costing system?

• A) Predetermined overhead rates are not used in a process-costing system.
• B) If direct material cost is the cost driver, direct labor and direct materials may be combined into the single element of prime cost.
• C) If direct labor hours is the cost driver, direct labor and manufacturing overhead may be combined into the single element of conversion cost.
• D) If direct labor cost is the cost driver, direct labor and manufacturing overhead may be combined into the single element of conversion cost.
• E) Cost drivers are irrelevant in process-costing systems.

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