Costs at the unit-level of activity should be allocated to products using cost drivers that are:
A)Customer-oriented.
B)Design-related.
C)Volume-related.
D)Product-related.
E)Order-related.

Question

Quizplus · Accepted Answer

Costs at the unit-level of activity are costs that vary with the number of products produced, such as direct materials and direct labor. These costs should be allocated to products using cost drivers that are volume-related, such as the number of units produced, as this measures the level of activity that causes the cost to vary. Customer-oriented, design-related, product-related, and order-related cost drivers do not directly relate to the level of activity that causes unit-level costs to vary.

Costs at the Unit-Level of Activity Should Be Allocated to Products