Select the incorrect statement regarding the use of cost drivers in activity-based costing systems.
A) ABC uses volume-based and activity-based cost drivers.
B) Volume-based drivers are most appropriate for costs that are affected by the number of units produced.
C) ABC's use of multiple cost drivers will produce less precise accurate unit costs when a company produces many different products that require different types and levels of overhead costs.
D) An arbitrary cost driver must be selected when allocating facility-level activity costs.

Question

Quizplus · Accepted Answer

ABC's use of multiple cost drivers will produce more (rather than less)accurate unit costs when a company produces many different products that require different types and levels of overhead costs.

Select the Incorrect Statement Regarding the Use of Cost Drivers