Which of the Following Is True

question 140

Multiple Choice

Which of the following is true?

• A)Overhead costs are often affected by many issues and are frequently too complex to be explained by any one factor.
• B)The departmental overhead rate is not usually based on measures closely related to production volume.
• C)The departmental overhead rate is most accurate in assigning overhead costs that are not driven by production volume.
• D)Allocated overhead costs will be the same no matter which allocation method is used.
• E)When cost analysts are able to logically trace cost objects to costs,costing accuracy is improved.

---

Definitions:

Risk Takers

Individuals or entities that are willing to take risks in pursuit of gain, often characterized by investments in ventures with uncertain outcomes.

Adverse Selection

A situation in which sellers have information that buyers do not, leading to transactions that favor the seller.

Insurance

A monetary service that offers coverage against possible future harms or losses in return for a premium payment.

Adverse Selection

Adverse selection is a situation in financial markets where there is asymmetric information leading buyers or sellers to make decisions that can result in the market becoming skewed or unbalanced, often seen in insurance markets.