Which of the Following Statements Is True with Respect to Cost

question 4

Multiple Choice

Which of the following statements is true with respect to cost drivers?

• A) Overhead costs should only have one cost driver.
• B) In labor intensive companies, direct labor hours often serves as the cost driver.
• C) When using a cost driver, the same amount of overhead will be allocated to all products.
• D) Cost drivers are only used to allocate machine hours.

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Definitions:

Skewed

Refers to a distribution that is asymmetrical, with data points tending to be more spread out on one side of the mean than the other.

Travel Time

The duration taken to move from one location to another, often considered in planning and analysis of transportation systems.

Bin Width

The size of intervals in a histogram or frequency distribution, affecting data visualization and analysis.

Lower Bin Limit

The smallest value in a range (bin) for grouping data points in a histogram or frequency distribution chart.