A company may use several different cost drivers to allocate its indirect costs.

Name: A company may use several different cost drivers to allocate its indirect costs.
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Question

Quizplus · Accepted Answer

A company may use different cost drivers such as direct labor hours, machine hours, or number of units produced to allocate its indirect costs to its products or services. The choice of cost driver depends on the nature of the business and the activities that consume the indirect costs.

A Company May Use Several Different Cost Drivers to Allocate