To encourage the design of products that are simpler to manufacture or less costly to service, would be an example of which cost allocation purpose?
A)to provide information for economic decisions
B)to motivate managers and employees
C)to determine employees' wages
D)to measure income and assets for reporting to external parties
E)to justify costs or compute reimbursements

Question

Quizplus · Accepted Answer

Cost allocation can serve as a motivational tool for managers and employees to encourage behaviors that ultimately benefit the company, such as designing products that are simpler to manufacture or less costly to service. This purpose is known as incentivizing cost reduction. The other options listed do not align with this specific purpose.

To Encourage the Design of Products That Are Simpler to Manufacture