In general,the selection of activity cost drivers requires making trade-offs between accuracy and the cost of measurement.

Question

Quizplus · Accepted Answer

Activity cost drivers are used to allocate indirect costs to cost objects based on the activities that drive those costs. However, selecting the most accurate cost driver can often be expensive to measure, so decisions must be made on the best compromise between accuracy and measurement cost. Therefore, the statement is true.

In General,the Selection of Activity Cost Drivers Requires Making Trade-Offs