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

---

Definitions:

Air Sacs

Small, balloon-like structures in the lungs where oxygen and carbon dioxide are exchanged with the blood.

Newborns

Infants in their first few weeks of life, typically considered up to one month old.

Respiratory Problems

Health issues affecting the organs and tissues that make gas exchange possible, like the lungs and airways.

Adults

Individuals who have reached the age where they are considered fully developed and responsible for their actions from a legal or societal standpoint.