To guide cost allocation decisions, the fairness or equity criterion is:
A)the criterion often cited in government contracts
B)superior when the purpose of cost allocation is for economic decisions
C)used more frequently than the other criteria
D)the primary criterion used in activity-based costing

Question

Quizplus · Accepted Answer

The fairness or equity criterion is often cited in government contracts to ensure that costs are allocated in a manner that is perceived as fair and equitable among different parties involved.

To Guide Cost Allocation Decisions, the Fairness or Equity Criterion