Which of the Following Statements Is False

question 149

Multiple Choice

Which of the following statements is false?

• A) Both direct and indirect costs can be assigned to a cost object.
• B) Cost drivers are often selected based on the availability of information.
• C) Volume measures are good drivers for fixed overhead costs.
• D) Fixed costs that do not have a definitive cost driver are allocated using an allocation base that distributes a rational share of the cost to each product.

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Definitions:

Average Cost

A calculation used in finance and economics that divides the total cost of production by the number of goods produced, yielding the cost per unit.

Perpetual Inventory System

An accounting method that records inventory updates continuously as sales and purchases occur.

FIFO

"First In, First Out," an inventory valuation method where goods first added to inventory are the first sold, used to determine the cost of goods sold and remaining inventory.

Ending Inventory

Ending Inventory is the total value of all inventory, including raw materials, work-in-process, and finished goods, that a company has at the end of an accounting period.