Which of the Following Statements Is True Regarding Cross-Subsidies

question 29

Multiple Choice

Which of the following statements is true regarding cross-subsidies?

• A) They occur when factory workers are trained to work on many different machines.
• B) They occur when high-volume products are assigned more than their fair share of overhead costs.
• C) They occur when high-volume products have more direct material and direct labour costs than overhead costs.
• D) They occur when more than one cost driver can be determined for a particular overhead cost item.

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Definitions:

Nonfunctionality

The state of being without a specific function or not operating in a normal or intended manner.

Irreversibility

A concept in cognitive development where the understanding that certain processes cannot be undone or returned to their original state is lacking.

Noncorporeal Continuation

The view that some form of life and personal continuity exists after the physical body has died.

Biological Causality

The study of biological processes and phenomena and their causes and effects.