To Guide Cost Allocation Decisions, the Fairness or Equity Criterion

question 40

Multiple Choice

To guide cost allocation decisions, the fairness or equity criterion ________.

• A) considers reasonableness as a matter of judgment rather than an operational criterion
• B) allocates cost among the beneficiaries in proportion to the benefits each receives
• C) is used more frequently than any other criteria
• D) is the primary criterion used in activity-based costing

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Definitions:

Irrelevant

Not connected with or relevant to something.

Incomplete

A state of being not fully formed, finished, or lacking some parts.

Care

The provision of what is necessary for the health, welfare, maintenance, and protection of someone or something.

Generativity

The concern for establishing and guiding the next generation, often expressed through parenting, teaching, or mentorship.