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) 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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Definitions:

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Surgery that removes or destroys brain tissue in an effort to change behavior.

Antipsychotic Drugs

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A neurodegenerative disorder that affects movement, often including tremors, stiffness, and difficulty with walking and coordination.

Sluggishness

A state of being slow-moving or lacking in energy.