When the Purpose of Cost Allocation Is to Provide Information

question 103

Multiple Choice

When the purpose of cost allocation is to provide information for economic decisions or to motivate managers and employees,the best criteria are ________.

• A) the cause-and-effect and the ability-to bear criteria
• B) the cause-and-effect and the benefits-received criteria
• C) the benefits-received and the fairness criteria
• D) the fairness and the ability-to-bear criteria

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Definitions:

Organizational Learning

The capacity of an organization to acquire, apply, and transfer knowledge to improve its performance over time.

Double-Loop Learning

A learning process where errors are corrected by reevaluating and modifying the underlying norms, policies, and objectives that led to the errors, in contrast to single-loop learning which focuses only on fixing the errors themselves.

Entire System

Entire system refers to all components or elements of a system functioning together as a whole, in any field such as information technology, business, or ecological studies.

Positive Feedback

A process in which the effects of a small disturbance on a system include an increase in the magnitude of the perturbation.