Which of the following observations concerning the full-cost approach is NOT true?
A) All costs are not allocated in all situations.
B) It requires that difficult-to-allocate costs be split on some basis.
C) Fixed costs are also allocated in some way.
D) It could lead to a different decision than the one suggested by the contribution margin approach.
E) Common costs are also allocated in some way.

Question

Quizplus · Accepted Answer

The full-cost approach involves allocating all costs, including fixed and common costs, in decision-making. Therefore, the statement that "All costs are not allocated in all situations" is not true concerning the full-cost approach.

Which of the Following Observations Concerning the Full-Cost Approach Is