Select the Incorrect Statement from the Following

question 85

Multiple Choice

Select the incorrect statement from the following.

• A) If overhead costs are allocated based on 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:

Traffic Problem

A situation caused by a high volume of vehicles leading to congestion, delays, and accidents on roadways.

Means-end Analysis

A problem-solving strategy that involves breaking down a problem into smaller parts and addressing each part to reach the desired outcome.

Upper-level Courses

Advanced coursework in a specific field of study that typically requires completion of introductory and intermediate courses as prerequisites.

Research Methods

Various strategies, techniques, and tools used to investigate questions and acquire knowledge.