What Is the Primary Drawback to Using a Volume-Driven Base,such

question 54

Multiple Choice

What is the primary drawback to using a volume-driven base,such as direct labor or machine hours,to apply overhead to products in a traditional cost accounting system?

• A)The cost accountant may not fully understand how to track direct labor or machine hours.
• B)It is difficult for an AIS to incorporate such a measurement into its system.
• C)It is difficult for an ERP to incorporate such a measurement into its integrated system.
• D)Many overhead costs are incorrectly allocated to products since they do not vary with production volume.

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