Select the incorrect statement from the following.
A. In highly automated environments where companies produce many different products with varying levels of production, activity-based cost drivers are superior to volume-based drivers.
B. If overhead costs are allocated based on activities, the amount of overhead allocated to a particular product can be reduced by increasing the number of activities required by the product, thereby spreading the overhead costs over more units.
C. Activity-based cost drivers produce a better cost allocation than volume-based drivers because they distribute only relevant costs to the appropriate products.
D. Activity costs are considered relevant for decision-making because the cost of an activity will be avoided if the activity is eliminated.
Answer: B
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