Which of the Following Statements Regarding the Two-Stage Cost Allocation

question 42

Multiple Choice

Which of the following statements regarding the two-stage cost allocation process is (are) false?
(A) If a company has three cost pools, then it should also have three different cost allocation bases.
(B) The selection of an appropriate cost allocation base is more important for single-stage cost allocation systems than for two-stage cost allocation systems.

• A) Only A is false.
• B) Only B is false.
• C) Both of these are false.
• D) Neither of these is false.

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Definitions:

World Demand

The total demand for goods and services from all countries around the globe.

World Supply

The total amount of a particular good or service that is available to consumers globally.

World Price

The global market price of a commodity, determined by supply and demand factors across all participating countries.

Market Equilibrium

A situation in economics where the quantity of goods supplied is equal to the quantity of goods demanded at a specific price.