Which of the Following Statements Is False

question 56

Multiple Choice

Which of the following statements is false?

• A) Traditional costing systems tend to over cost high-volume product lines.
• B) Traditional costing systems tend to create a product cost distortion problem.
• C) In traditional costing, the high-volume products are often subsidising the low-volume products.
• D) Traditional product costing systems recognise a range of non-volume-based cost drivers.

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Definitions:

Discounted

A reduction applied to a price or rate, lowering the original amount.

Simple Interest Rate

The percentage of the principal amount that is paid as interest for a specified period.

Contract

A contract that is recognized and can be enforced by law, formed between two or more participants.

Simple Interest

Simple Interest is a calculation of interest that does not take into account the effect of compounding. It is typically calculated by multiplying the daily interest rate by the principal amount and the number of days that elapse between payments.