What would contribute to distortions caused by unit level rates?
A)Assign costs by multiplying activity rates by the amount of activity consumed.
B)Calculate individual rates for each activity with activity drivers.
C)Increase the number of rates used that reflect the diverse activity and non-unit overhead drivers.
D)Have one unit level of cost drivers.

Question

Quizplus · Accepted Answer

Having one unit level of cost drivers can lead to distortions because it oversimplifies the allocation of costs by not adequately reflecting the diversity of activities and their respective consumption of resources. This approach fails to account for the complexity of operations and the varying cost drivers beyond just unit-level activities, leading to inaccurate cost information.

What Would Contribute to Distortions Caused by Unit Level Rates