Which of the Following Statements Is True Regarding Cross Subsidies

question 23

Multiple Choice

Which of the following statements is true regarding cross subsidies?

• A) They occur when factory workers are trained to work on many different machines.
• B) They occur when high-volume products are assigned more than their fair share of overhead costs.
• C) They occur when high-volume products have more direct material and direct labor costs than overhead costs.
• D) They occur when more than one cost driver can be determined for a particular overhead cost item.

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