Which of the following is true concerning cost drivers for the predetermined overhead rate in a process-costing system?
A. Predetermined overhead rates are not used in a process-costing system.
B. If direct labor cost is the cost driver, direct labor and manufacturing overhead may be combined into the single element of conversion cost.
C. If direct labor hours is the cost driver, direct labor and manufacturing overhead may be combined into the single element of conversion cost.
D. If direct material cost is the cost driver, direct labor and direct materials may be combined into the single element of prime cost.
E. Cost drivers are irrelevant in process-costing systems.
Answer: B
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