An Increase in an Activity Base Must Cause an Increase

question 94

True/False

An increase in an activity base must cause an increase in actual overhead costs incurred for that base to be considered a cost driver.

---

Definitions:

Compounded Monthly

The interest calculation method where interest is added to the principal balance monthly, leading to interest on interest.

Conservative Investment

An investment strategy focused on preserving capital and generating a reliable, but possibly lower, return.

Retirement Account

A financial account specifically designated for saving and investing for retirement, offering tax benefits.

Fixed Expenses

Costs that do not fluctuate with changes in production level or sales volume, remaining constant over a period of time such as rent or mortgage.