An allocation method is a logical method:
A) To trace variable costs to products
B) Used to price products
C) To assign indirect costs to products
D) To decide which products to produce

Question

Quizplus · Accepted Answer

An allocation method is used to assign indirect costs to products. It helps in distributing the overhead costs to each product in a fair and accurate manner. Allocation methods can be based on various factors like machine hours, labor hours, or square footage.

An Allocation Method Is a Logical Method