Which of the following statements is true?
A) Cost drivers are a special kind of allocation base
B) Allocation bases are a special kind of cost driver
C) Cost drivers and allocation bases are two names for the same thing
D) Allocation bases are seldom used in traditional costing systems

Question

Quizplus · Accepted Answer

Allocation bases are used to allocate costs to cost objects, while cost drivers are used to determine the amount of costs to be allocated to each cost object. Therefore, cost drivers are a specific type of allocation base.

Which of the Following Statements Is True