MCQ

How does direct cost tracing improve cost accuracy?

A. It reclassifies costs or cost pools that vary with the quantity of a single activity cost driver as direct.

B. It identifies the cause-and-effect relationship between direct costs and indirect costs.

C. It identifies the cause-and-effect relationship between activities and non activities.

D. It makes no assumptions about the cause-and-effect relationship between direct costs and activities.

E. Because with the greater number of cost pools, it does not have to concerned with the overhead costs used by different products.