The Cost Allocation Methodology Is Used in Allocating Direct Costs

question 28

Multiple Choice

The cost allocation methodology is used in allocating direct costs to a program. Which of the following is NOT a methodology used in cost allocation?

• A) Direct labor costs
• B) Direct costing
• C) Total expenses
• D) Total direct costs

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Definitions:

Interperiod Tax Allocation

The process of apportioning income tax expenses between different accounting periods to match tax expense with the revenue that generated the tax.

Intraperiod Tax Allocation

The process of allocating income taxes within a single financial reporting period among different items that directly affect reported net income or loss.

Income Tax Allocation

The process of assigning income tax expense to various accounting periods because of temporary differences between accounting income and taxable income.

Tax Laws

Regulations imposed by governmental agencies in relation to the calculation and payment of taxes by individuals and organizations.