Indicate whether each of the following statements is true or false.
When a company can identify more than one cost driver for a particular cost, it should use the cost driver with the strongest cause-and-effect relationship to the cost.
Availability and cost of information are likely to influence a company's choice of cost drivers.
A company should never use a cost driver unless there is a strong causal relationship between the cost and the cost driver.
Different cost drivers almost always give about the same results when a cost is allocated to cost objects.
In allocating costs among departments, a company must consider how department managers are likely to respond.

Question

Indicate whether each of the following statements is true or false.
 When a company can identify more than one cost driver for a particular cost, it should use the cost driver with the strongest cause-and-effect relationship to the cost.
Availability and cost of information are likely to influence a company's choice of cost drivers.
A company should never use a cost driver unless there is a strong causal relationship between the cost and the cost driver.
Different cost drivers almost always give about the same results when a cost is allocated to cost objects.
In allocating costs among departments, a company must consider how department managers are likely to respond.

Quizplus · Accepted Answer

The Answer of Indicate whether each of the following statements is true or false.
 When a company can identify more than one cost driver for a particular cost, it should use the cost driver with the strongest cause-and-effect relationship to the cost.
Availability and cost of information are likely to influence a company's choice of cost drivers.
A company should never use a cost driver unless there is a strong causal relationship between the cost and the cost driver.
Different cost drivers almost always give about the same results when a cost is allocated to cost objects.
In allocating costs among departments, a company must consider how department managers are likely to respond.

Indicate Whether Each of the Following Statements Is True or False