Which of the following should not be used as the allocation base in a company that appropriately uses a single plant wide rate?
A)Sales volume
B)Machine hours
C)Material costs
D)Direct labor cost
E)Direct labor hours

Question

Quizplus · Accepted Answer

Sales volume is not a suitable allocation base for a single plant wide rate because it does not have a direct correlation with production costs. The other options (B, C, D, and E) are all common allocation bases used in manufacturing settings.

Which of the Following Should Not Be Used as the Allocation