Under the traditional approach to cost allocation,the costs in each cost pool are allocated to a product in proportion to the product's usage of the ________.
A)available capacity
B)budgeted capacity
C)cost-allocation base
D)step down method

Question

Quizplus · Accepted Answer

The traditional approach to cost allocation allocates costs in each cost pool to a product in proportion to the product's usage of the cost-allocation base. The cost-allocation base is a measure of the activity that causes the cost to be incurred, such as machine hours or direct labor hours. Therefore, choice C is the best answer. Choices A, B, and D are not accurate because they do not relate to the cost-allocation base or the allocation of costs.

Under the Traditional Approach to Cost Allocation,the Costs in Each