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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Definitions:

Fixed Beliefs

Fixed beliefs are rigid ideas or convictions held by an individual that are resistant to change even when presented with new information.

Characteristics

Traits or features that distinguish a person, object, or phenomenon from others.

Perception Influences

Factors that affect how individuals interpret and make sense of their sensory experiences and shape their understanding of the world.

Contrast

The state of being strikingly different from something else in juxtaposition or close association.