All of the following statements are true except:

		If the base in the predetermined overhead rate does not "drive" overhead costs, product costs will be distorted.
		In the past, direct labor accounted for up to 60% of the cost of many products, however, this situation has changed due to sophisticated automated equipment and increased need for skilled indirect workers.
		A cost driver refers to the direct materials and direct labor costs used in manufacturing environments.
		A cost driver is a factor, such as machine hours, beds occupied, computer time or flight hours that causes overhead costs.