The Use of Unit-Based Activity Drivers to Assign Costs Can

Multiple Choice

The use of unit-based activity drivers to assign costs can result in significant cost distortions only if:

A) overhead costs are a small percentage of total manufacturing costs.
B) direct material costs are a significant percentage of total manufacturing costs.
C) overhead costs are a significant percentage of total manufacturing costs.
D) direct material costs are a small percentage of total manufacturing costs.