Multiple Choice
Which method of allocation probably best estimates actual overhead costs used? Why?
A) Single direct labour-hours cost driver because it is the easiest to analyse and interpret.
B) Three activity-cost drivers because they best reflect the relative consumption of resources.
C) Single direct labour-hours cost driver because it is best to allocate total costs uniformly to individual jobs.
D) Three activity-cost drivers because product costs can be significantly cross-subsidised.
Correct Answer:
Verified
Correct Answer:
Verified
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