Exercise 1) After reading chapter 15 test your conceptual knowledge for the material presented in the chapter

a. Finding a single cost driver that changes in the same proportion as variable factory overhead costs is:

Multiple Choice

• Simplified by breaking out the fixed portion of overhead cost.

• The first step in variable overhead cost assignment.

• Difficult but manageable using advanced statistical techniques.

• An important goal of effective cost system design.

• Difficult, if not impossible, because of the underlying nature of variable overhead cost components