Which of the following statements describes a characteristic of overhead costs?
A) Overhead costs are distorted due to uneven production from period to period.
B) Overhead costs have a direct relationship with units produced like direct materials.
C) High production in a month leads to high unit overhead costs.
D) All of these are correct.
E) None of these are correct.

Question

Quizplus · Accepted Answer

Overhead costs are often affected by fluctuations in production levels, leading to distortion in cost per unit. Therefore, option A is correct. Option B is incorrect because overhead costs do not have a direct relationship with units produced like direct materials. Option C is also incorrect because high production in a month can lead to lower unit overhead costs if the fixed costs are spread over a larger volume of production.

Which of the Following Statements Describes a Characteristic of Overhead