Question

Cost behavior for variable overhead is more difficult to predict than the behavior of direct materials or direct labor cost for all the following reasons except: A. Multiple cost drivers are involved with variable overhead. B. Direct material and direct labor contain no semi-variable component. C. The variable portion of overhead must first be separated from the fixed portion. D. Variable overhead is a relatively small part of total overhead.

Answer 1

D. Variable overhead is a relatively small part of total overhead.

Step-by-step explanation:

The variable overhead of the cost behavior would become more difficult for estimation as compared with the behavior of direct materials or direct labor for all the given reasons but it should not be valid for the variable overhead that contains small part of the total overhead

Therefore according to the given situation, the option D is correct