The proportion of cost allocated to a cost object equals the proportion of driver units in that cost object.

Question

Quizplus · Accepted Answer

This statement is true. The driver units are the measure of activity that causes the cost to be incurred, and the proportion of driver units in a particular cost object is used to allocate the cost to that object. Therefore, the proportion of cost allocated to a cost object will be proportional to the proportion of driver units in that object.

The Proportion of Cost Allocated to a Cost Object Equals