Select the Incorrect Statement from the Following

question 60

Multiple Choice

Select the incorrect statement from the following.

• A) If overhead costs are allocated on the basis of activities,the amount of overhead allocated to a particular product can be reduced by increasing the number of activities required by the product,thereby spreading the overhead costs over more units.
• B) Activity costs are considered relevant for decision making because the cost of an activity will be avoided if the activity is eliminated.
• C) In highly automated environments where companies produce many different products with varying levels of production,activity-based cost drivers are superior to volume-based drivers.
• D) Activity-based cost drivers produce a better cost allocation than volume-based drivers because they distribute only relevant costs to the appropriate products.

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Definitions:

Check 21 Act

A law that makes check clearing much quicker by the use of a substitute check in place of the original check for electronic check processing.

Electronic Transfer

The digital movement of funds from one account to another, either within the same financial institution or between different ones.

Beneficiary

An person or entity designated to receive benefits or assets under a legal arrangement or instrument, such as a will, trust, or insurance policy.

Image Replacement Document

A document that substitutes for the original through the use of photographs or scanned copies, often used when the original is lost or inaccessible.