Allocated costs equals:
A)The number of cost pools used multiplied by the driver units.
B)The number of cost pools used divided by the driver units.
C)The number of driver units used multiplied by the cost per driver unit.
D)The number of driver units used divided by the cost per driver unit.
E)None of the above.

Question

Quizplus · Accepted Answer

Allocated costs are calculated by multiplying the number of driver units used by the cost per driver unit. This is because allocated costs are costs that are assigned to a particular cost object using a predetermined method of allocation, based on the usage of a particular driver unit. Therefore, the correct formula for calculating allocated costs is the number of driver units used multiplied by the cost per driver unit.

Allocated Costs Equals