Cost Behavior for Variable Overhead Is More Difficult to Predict

question 46

Multiple Choice

Cost behavior for variable overhead is more difficult to predict than the behavior of direct materials or direct labor cost for all the following reasons except:

• A) Multiple cost drivers are usually involved with variable overhead.
• B) Direct material and direct labor contain no semi-variable component.
• C) The variable portion of overhead must first be separated from the fixed portion.
• D) Variable overhead is a relatively small part of total overhead.