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Cost Accounting A Managerial Emphasis Study Set 1
Quiz 14: Period Cost Allocation
One of the Purposes of Allocating Indirect Costs Is to Justify
Question 7
True False
One of the purposes of allocating indirect costs is to justify costs or compute reimbursement amounts.
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Q 8
When using the causality criterion, cost drivers are selected based on a cause-and-effect relationship between the business functions.
Q 9
The ability-to-bear criterion is considered superior when the purpose of cost allocation is motivation.
Q 10
The narrower the scope of service provided by, for example, R&D, the more important it is to allocate costs proportionately to the benefits received by the internal users.
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