Multiple cost drivers ________.
A) have only one revenue driver
B) can utilize the simple CVP formula
C) have no unique breakeven point
D) are the result of multiple products

Question

Quizplus · Accepted Answer

Multiple cost drivers mean that there are several factors that influence the cost of producing a product or service. This can result in a complex cost structure where there is no unique breakeven point, as the breakeven point will depend on the combination of cost drivers that affect the business. The simple CVP formula assumes that there is only one cost driver (usually volume), which is not the case when there are multiple cost drivers. Multiple products may or may not be a factor in this scenario, as it is possible for a single product or service to have multiple cost drivers.

Multiple Cost Drivers ________