Advantages of using the full cost of the product as the cost base include all of the following EXCEPT that:
A)managers are informed regarding the minimum long-run cost they need to recover to stay in business
B)it limits the ability of a salesperson to cut prices
C)fixed cost allocations can be arbitrary
D)it does not require a detailed analysis of cost behavior for computations

Question

Quizplus · Accepted Answer

Fixed cost allocations can be arbitrary, which is a disadvantage, not an advantage, of using the full cost of the product as the cost base.

Advantages of Using the Full Cost of the Product as the Cost