Which of the following statements is
A) Both direct and indirect costs can be assigned to a cost object.
B) Cost drivers are often selected based on the availability of information.
C) Volume measures are good drivers for fixed overhead costs.
D) Fixed costs that do not have a definitive cost driver are allocated using an allocation base that distributes a rational share of the cost to each product.

Question

Quizplus · Accepted Answer

By definition,the volume of production does not drive fixed costs.The object of allocating fixed costs to products is to distribute a rational share of the overhead cost to each product.Selecting an allocation base that spreads total overhead cost equally over total production often produces a rational distribution.

Which of the Following Statements Is