Final answer:
The correct answer is A. True; cost driver selection does impact managers' behavior and can influence their decision-making by providing clarity on what contributes to costs, aiding in cost benefit analyses, and overall guiding strategic financial decisions.
Step-by-step explanation:
Cost driver selection can indeed impact managers' behavior and influence how they make decisions, so the correct answer is A. True.
A cost driver is a factor that creates or drives the cost of an activity. By assigning cost drivers to activities, managers can better understand the resources and efforts that contribute to costs and can be more strategic in budgeting and process improvements.
Cost drivers help in the utilization of cost benefit analysis, a decision-making tool that compares the costs and benefits of a potential action. In the context of cost benefit analysis, managers weigh marginal costs against marginal benefits to make informed decisions that can influence the financial health of a business.
Moreover, taxes as a cost component can affect economic elements such as consumer behavior and resource allocation, which aligns with the broader theme that different cost implications can shape managerial decision-making.
Furthermore, cognitive demands as observed through the study by Bruno & Abrahão (2012) on decision accuracy highlight that an increased cognitive load due to numerous decisions can potentially lead to more errors, impacting a manager's effectiveness and their decision outcomes.