Final answer:
The correct answer is d. Overhead costs cannot be easily traced to units of product as direct labor can. Unlike variable costs, overhead expenses are more static and often allocated using activity-based costing.
Step-by-step explanation:
The correct answer to the student's question about overhead costs is d. Cannot be traced to units of product in the same way that direct labor can. Overhead costs are expenses that are not directly tied to the production of goods or services, like rent, utilities, and administrative salaries. These costs cannot be directly attributed to the production of specific units of product, as can direct materials and direct labor. Unlike variable costs, such as direct materials and labor, which vary directly with the level of production, overhead costs are more static and are typically allocated based on a predetermined overhead rate.
Many businesses use activity-based costing (ABC) to assign overhead costs to products more accurately. ABC uses multiple cost drivers to allocate overhead, taking into account the actual activities that incur costs. In contrast, traditional costing might use a single driver like machine hours or labor hours, which can lead to less accurate product costing.