Which of the following statements is FALSE?
A)There is a cause-and-effect relationship between the cost driver and the amount of cost.
B)Fixed costs have cost drivers over the short run.
C)Over the long run all costs have cost drivers.
D)Volume of production is a cost driver of direct manufacturing costs.

Question

Quizplus · Accepted Answer

Fixed costs do not have cost drivers over the short run, as they remain constant regardless of changes in activity levels. Cost drivers are only applicable to variable costs.

Which of the Following Statements Is FALSE