Consider the following statements regarding product-sustaining activities: I. Th

Question

Consider the following statements regarding product-sustaining activities:

I. The costs are driven based on number of batches that are run.
II. The costs are driven by the number of raw materials used to produce a product.
III. The costs are driven based on the number of different products or parts.
IV. The costs are driven based on the percent of plant usage for a given product.

Which of the above statements is (are) true?

I only.

II only.

III only.

I and II.

IV.

I only.

II only.

III only.

I and II.

IV.

Explanation / Answer

Product sustainting activities cost are allocated on number of product not batches or units

So answer is III) The costs are driven based on the number of different products or parts.

So answer is c) III

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