Indicate whether each of the following statements is true or false.When a company can identify more than one cost driver for a particular cost, it should use the cost driver with the strongest cause-and-effect relationship to the cost.  Availability and cost of information are likely to influence a company's choice of cost drivers.  A company should never use a cost driver unless there is a strong causal relationship between the cost and the cost driver.  Different cost drivers almost always give about the same results when a cost is allocated to cost objects.  In allocating costs among departments, a company must consider how department managers are likely to respond.  

What will be an ideal response?


When a company can identify more than one cost driver for 
a particular cost, it should use the cost driver with the strongest cause-and-effect relationship to the cost.
True
Availability and cost of information are likely to influence 
a company's choice of cost drivers.
True
A company should never use a cost driver unless there is a strong causal relationship between the cost and the cost driver.False
Different cost drivers almost always give about the same results when a cost is allocated to cost objects.False
In allocating costs among departments, a company must consider how department managers are likely to respond.True

Business

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