In order to choose the proper activity base for a cost, managerial accountants must be familiar with the operations of the entity.

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Quizplus · Accepted Answer

This statement is true. The activity base used in cost accounting should be tailored to the specific operations of the entity in order to accurately allocate costs. Therefore, managerial accountants must have knowledge of the entity's operations in order to choose the appropriate activity base.

In Order to Choose the Proper Activity Base for a Cost