Which of the following statements about cost drivers in ABC systems is FALSE? 1. cost driver for a cost pool should have a cause

Question

Colt1911 [192]

3 years ago

5

Which of the following statements about cost drivers in ABC systems is FALSE? 1. cost driver for a cost pool should have a cause

and effect relationship to the costs in the pool 2. the cost drivers should be duration drivers 3. 100% correlation between the cost driver activity and the variation in the cost is not necessary 4. the cost driver activities can be quantified

Business

1 answer:

Lisa [10] · Answer 1 · 2022-05-19T15:04:34+03:00

Answer:

2. the cost drivers should be duration drivers

Explanation:

There are two types of cost drivers, transaction drivers and duration drivers:

transaction drivers are calculated by determining how many times did an activity occur, e.g. how many machine setups were carried out.
duration drivers are calculated based on the time it takes for an activity to occur, e.g. how many machine hours were sued to produce certain product.