In the cause-and-effect relationship between allocation base and activity cost in indirect costing systems,the indirect costs of operating modeling machines ________ with molding machine-hours.
A)decrease
B)increase
C)simplify
D)subtract
E)deteriorate

Question

Quizplus · Accepted Answer

In the cause-and-effect relationship between allocation base and activity cost in indirect costing systems, as the allocation base (molding machine-hours) increases, the indirect costs of operating modeling machines also increase proportionately. Therefore, the correct choice is B, increase.

In the Cause-And-Effect Relationship Between Allocation Base and Activity Cost