If overhead is a significant proportion of the unit manufacturing costs, the distortion caused by using multi-level drivers can be serious.

Name: If overhead is a significant proportion of the unit manufacturing costs, the distortion caused by using multi-level drivers can be serious.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Using multi-level drivers in activity-based costing actually helps in accurately assigning overhead costs based on the actual activities, thereby reducing distortion in unit manufacturing costs.

If Overhead Is a Significant Proportion of the Unit Manufacturing