Which of the Following Statements Concerning Cost Drivers Is Incorrect

question 23

Multiple Choice

Which of the following statements concerning cost drivers is incorrect?

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

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Definitions:

Atlanta Compromise

A speech delivered by Booker T. Washington in 1895 advocating for African American economic progress and education as a route to racial equality, while suggesting a temporary acceptance of segregation.

Gunnar Myrdal

A Swedish economist and sociologist known for his influential study on race relations in the United States, titled "An American Dilemma" (1944).

Segregation

The action or state of setting someone or something apart from others, often based on racial, sexual, or religious discrimination.

Harassment

Unwanted and unwelcoming behavior that includes bullying, discrimination, and sexual harassment, creating a hostile environment for the victim.