If a business offers both routine and specialized services, a single cost driver rate will overprice: A. the specialized service. B. neither the routine nor the specialized service. C. both the routine and the specialized service. D. the routine service.

Question

Business

Jermaine

17 April, 02:28

If a business offers both routine and specialized services, a single cost driver rate will overprice: A. the specialized service. B. neither the routine nor the specialized service. C. both the routine and the specialized service. D. the routine service.

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Answers (1)

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Daphne Baxter · Answer 1

D. the routine service.

Explanation:

Single cost driver rate: It is a cost assigned to each unit of cost driver activity directly. Cost driver also influence other business activity and effect the total cost incurred.

In the given case, Business offer both routine and specialized service, as we know single cost driver influence driver directly, therefore, cost driver of specialized service will overprice the routine service.