Answer (B) is correct . Avoidable costs are those that may be eliminated by not engaging in an activity or by performing it more efficiently.
Answer (A) is incorrect because Opportunity cost is the maximum benefit forgone by using a scarce resource for a given purpose. It is the benefit (for example, the contribution to income) provided by the best alternative use of that resource.
Answer (C) is incorrect because A cost driver “is a measure of activity, such as direct labor hours, machine hours, beds occupied, computer time used, flight hours, miles driven, or contracts, that is a causal factor in the incurrence of cost to an entity” (SMA 2A).
Answer (D) is incorrect because Indirect costs cannot be specifically associated with a given cost object in an economically feasible way. They are defined as costs that are not directly identified with one final cost object but that are identified with two or more final cost objects or with at least one intermediate cost object.
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