Cost allocations can be used to divide what type of costs among products or divisions:
A) fixed selling and administrative costs
B) all indirect fixed costs
C) fixed manufacturing costs
D) all manufacturing costs

Question

Quizplus · Accepted Answer

Cost allocations are used to divide all indirect fixed costs among products or divisions. Direct costs are typically already assigned to a specific product or division, so cost allocations are used for indirect costs such as overhead expenses. Choices A, C, and D are all limited to specific types of costs, while choice B covers all indirect fixed costs.

Cost Allocations Can Be Used to Divide What Type of Costs