Which Purpose of Cost Allocation Is Used to Decide on the Selling

question 32

Multiple Choice

Which purpose of cost allocation is used to decide on the selling price for a customized product or service?

• A)to provide information for economic decisions
• B)to motivate managers and other employees
• C)to justify costs or compute reimbursement
• D)to measure income and assets for reporting to external parties

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Definitions:

Singer Sewing Machines

Brand of sewing machines first established in 1851, known for its pivotal role in the development of the garment industry.

Kodak

A technology company historically known for its significant contributions to photography and imaging industries through the development of photographic films and cameras.

Industrial Capitalism

Economic system characterized by private or corporate ownership of capital goods, investments determined by private decision, and prices, production, and the distribution of goods determined mainly by competition in a free market.

Commercial Capitalism

An economic system where trade, goods, and capital are privately controlled and operated for profit, characterized by the emergence of market economies and merchant classes.