Which of the following is the first step in the cost-allocation decision process?
A)Calculate the cost-allocation rate for each indirect cost pool.
B)Identify the purpose of the cost allocation.
C)Identify the direct inputs that are already measured.
D)Identify the relevant indirect costs included in the cost pool(s)or numerator(s).
E)Analyze the alternatives and select the best one for the denominator.

Question

Quizplus · Accepted Answer

The first step in the cost-allocation decision process is to identify the purpose of the cost allocation. This involves determining why the costs need to be allocated and what the allocation will be used for. Without a clear understanding of the purpose of the cost allocation, it is difficult to make informed decisions about how to allocate costs.

Which of the Following Is the First Step in the Cost-Allocation