In Determining the Amount of Indirect Costs to Be Allocated

question 26

Multiple Choice

In determining the amount of indirect costs to be allocated to the cost object the first step is:

• A) to develop a cost allocation formula
• B) to decide on the number of cost pools
• C) to select a cost driver
• D) to develop a predetermined cost rate

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Definitions:

Internal Causes

Reasons or factors within an organization or individual that lead to a specific effect or outcome, contrasting with external influences.

External Causes

Factors or circumstances outside of one's control that influence events or outcomes.

Perceivers

Individuals who interpret, process, and assign meaning to information and stimuli they receive from the environment.

Behavior

The behavior or responses of a person in reaction to outside or inside triggers.