To allocate central costs, a company could use all of the following cost drivers EXCEPT the
A) revenue of each division.
B) cost of goods sold by each division.
C) total assets of each division.
D) total period costs of each division.

Question

Quizplus · Accepted Answer

While A, B, and C are all commonly used cost drivers for allocating central costs, total period costs of each division may not be a meaningful indicator of the resources used by the division and thus not an appropriate cost driver.

To Allocate Central Costs, a Company Could Use All of the Following