Indicate Whether Each of the Following Statements Is True or False

question 159

Essay

Indicate whether each of the following statements is true or false.
When a company can identify more than one cost driver for a particular cost, it should use the cost driver with the strongest cause-and-effect relationship to the cost.
Availability and cost of information are likely to influence a company's choice of cost drivers.
A company should never use a cost driver unless there is a strong causal relationship between the cost and the cost driver.
Different cost drivers almost always give about the same results when a cost is allocated to cost objects.
In allocating costs among departments, a company must consider how department managers are likely to respond.

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Definitions:

Articles of Confederation

The first written constitution of the United States, serving as its supreme law from 1781 to 1789.

First Amendment

A part of the U.S. Constitution that protects freedoms concerning religion, expression, assembly, and the right to petition.

Administrative Procedures Act

A U.S. law that governs the process by which federal agencies develop and issue regulations, including requirements for public notice and opportunity to comment.

Federal Regulation

Laws and rules enforced by federal agencies intended to control practices and ensure the public welfare.