Activity Based Costing Allocates Indirect Costs to Fixed Costs Based

question 32

Multiple Choice

Activity based costing allocates indirect costs to fixed costs based on different types of cost drivers.Which of the following is one of the cost drivers that serve as a basis of cost allocation?

• A) number of units produced
• B) number of labor hours
• C) quantity of materials used
• D) direct equipment costs

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Definitions:

Type I Error

The faulted rejection of an authentic null hypothesis, also termed as a "false positive."

Type II Error

The error that occurs when a statistical test fails to reject a false null hypothesis, also known as a "false negative" result.

Statistical Outcome

The result of any single observation or measurement regarding a statistical experiment.

Validity

The extent to which a concept, conclusion or measurement is well-founded and likely corresponds accurately to the real world.