When determining product cost,the last step in the traditional approach to cost allocation is ________.
A)divide costs in each producing department into direct costs and indirect costs
B)trace direct costs to products
C)select cost pools and cost allocation bases in each production department and assign indirect department costs to the appropriate cost pool
D)allocate the costs in each cost pool to the product in proportion to the usage of the related cost-allocation base

Question

Quizplus · Accepted Answer

The traditional approach to cost allocation includes several steps such as dividing costs into direct and indirect costs, tracing direct costs to products, selecting cost pools and allocation bases, and allocating costs in each pool to the product. The last step in this approach is to allocate the costs in each cost pool to the product in proportion to the usage of the related cost-allocation base. Therefore, the correct answer is D.

When Determining Product Cost,the Last Step in the Traditional Approach