A single indirect-cost rate distorts product costs because ________.
A) there is an assumption that all support activities affect all products in a uniform way
B) it recognizes specific activities that are required to produce a product
C) competitive pricing is ignored
D) it assumes all costs are product costs

Question

Quizplus · Accepted Answer

A single indirect-cost rate assumes that all support activities affect all products in a uniform way, which leads to distortions in product costs. This is because some products may require more support activities than others, but the same rate is allocated to all products.

A Single Indirect-Cost Rate Distorts Product Costs Because ________