Cost behavior for variable overhead is more difficult to predict than the behavior of direct materials or direct labor cost for all the following reasons except:
A) Multiple cost drivers are usually involved with variable overhead.
B) Direct material and direct labor contain no semi-variable component.
C) The variable portion of overhead must first be separated from the fixed portion.
D) Variable overhead is a relatively small part of total overhead.

Question

Quizplus · Accepted Answer

Variable overhead can indeed be a significant or small part of total overhead, but this does not inherently make its behavior more difficult to predict compared to direct materials or direct labor. The other options (A, B, C) directly relate to the complexities in predicting variable overhead costs.

Cost Behavior for Variable Overhead Is More Difficult to Predict