The term cost-allocation base can be used interchangeably with __________ rate when dealing with indirect costs.
A)cost-driver
B)activity
C)allocation
D)target

Question

Quizplus · Accepted Answer

A cost-driver is an activity or factor that causes indirect costs to be incurred, and it is used as a basis for allocating those costs to cost objects. Therefore, the term cost-allocation base can be used interchangeably with cost-driver when dealing with indirect costs. Options B), C), and D) are not correct because they do not accurately describe the relationship between indirect costs and the basis for allocating them.

The Term Cost-Allocation Base Can Be Used Interchangeably with __________