Select the Incorrect Statement Regarding the Use of Cost Drivers

Multiple Choice

Select the incorrect statement regarding the use of cost drivers in activity-based costing systems.

A) ABC uses volume-based and activity-based cost drivers.
B) Volume-based drivers are most appropriate for costs that are affected by the number of units produced.
C) ABC's use of multiple cost drivers will produce less accurate unit costs when a company produces many different products that require different types and levels of overhead costs.
D) An arbitrary cost driver must be selected when allocating facility-level activity costs.