Selection of a cost driver depends on:
A) The availability of information for both the cost and the potential cost driver.
B) A cause-and-effect relationship between the cost driver and the cost.
C) Judgment of management.
D) All of the answers are correct.

Question

Quizplus · Accepted Answer

All of the answers are correct. The selection of a cost driver should be based on the availability of information for both the cost and the potential cost driver, the existence of a cause-and-effect relationship between the cost driver and the cost, and the judgment of management. Therefore, all of the options are valid criteria for selecting a cost driver.

Selection of a Cost Driver Depends On