The Statement Concerning Cost Drivers That Is Incorrect Is

question 41

Multiple Choice

The statement concerning cost drivers that is incorrect is:

• A)As direct labour shrinks as a proportion of manufacturing costs it becomes a more accurate factor by which to apply overhead to products
• B)A cost driver is a measure of the activity that causes overhead costs
• C)In modern day manufacturing there has been a decline in labour costs and an increase in factory overheads as a percentage of product costs
• D)Inaccurate application of overhead to products can lead to wrong conclusions about which products are profitable

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