What Should Determine Whether an Allocation Base Is a Good

question 34

Multiple Choice

What should determine whether an allocation base is a good cost driver?

• A) Whether or not the base can be measured in terms of 'hours'.
• B) Whether or not the base can be applied plantwide.
• C) Whether or not the base can be measured with absolute accuracy.
• D) Whether or not there is a cause-and-effect relationship between the base and the overhead cost.

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