Which formula best represents the first step used to allocate an indirect cost to a cost object?
A) Total cost to be allocated/cost driver
B) Cost driver/allocation rate
C) Cost driver/total cost to be allocated
D) Allocation rate/total cost to be allocated

Question

Quizplus · Accepted Answer

The first step in allocating an indirect cost to a cost object is to determine the allocation rate, which is calculated by dividing the total cost to be allocated by the cost driver.

Which Formula Best Represents the First Step Used to Allocate