In selecting machine usage as the primary cost driver for the Production Department,management feels that there is a direct relationship between the number of machine hours used and the amount of overhead costs incurred.

Question

Quizplus · Accepted Answer

The statement indicates that there is a direct relationship between the number of machine hours used and the amount of overhead costs incurred, which suggests that machine usage is a suitable cost driver for the Production Department. Therefore, the answer is true.

In Selecting Machine Usage as the Primary Cost Driver for the Production