Indicate Whether Each of the Following Statements Is True or False.When

question 6

Short Answer

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:

Damages Determination

The process by which courts calculate the amount of money to be awarded to a party in a lawsuit for losses or injuries suffered.

Special Use Loss

A financial loss incurred due to the specialized nature of property or equipment that limits its use or marketability.

Fundamental Breach

A severe violation of a contract that permits the aggrieved party to terminate the agreement and potentially seek damages.

Exemption Clause

Language within a contract designed to protect a party by restricting certain legal claims or liabilities.