alleryStart learning →The traditional allocation system assigns manufacturing overhead using how many cost drivers?
AThirty drivers
BA single driver
CEleven drivers
DTwenty drivers
Answer & Solution
Correct answer: B. A single driver
1. The older method keeps the arithmetic simple.
2. The traditional allocation system assigns manufacturing overhead based on a single cost driver.
3. That driver is typically direct labor hours, labor dollars or machine hours.
4. So only one driver is used.
_Source: OpenStax Principles of Accounting Volume 2, Managerial Accounting (CC BY-NC-SA 4.0), Ch 6 'Activity-Based, Variable, and Absorption Costing', sections 6.1-6.5_
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