If a Cost Activity Does NOT Have Any Production-Related Cost

question 45

Multiple Choice

If a cost activity does NOT have any production-related cost driver that matches up with changes in the amount of overhead cost associated with the activity then:

• A) Any basis can be selected as a cost driver
• B) Direct labor hours should be used as the cost driver
• C) No cost driver should be selected; the costs should be treated as common costs
• D) Number of items produced should be the cost driver.

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Definitions:

Population Growth

The increase in the number of individuals in a population, often measured in terms of birth rates, death rates, immigration, and emigration.

Sterilization

The process of eliminating all forms of life, including microorganisms, from an object or area, typically using chemical agents, heat, or radiation.

Contraceptive Use

The practice of utilizing methods or devices to prevent pregnancy as part of reproductive health and family planning.

One-Child Pledge

A policy or agreement to limit families to only one child, often to control population growth.