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:

Pulmonary Vein

A blood vessel that carries oxygenated blood from the lungs back to the left atrium of the heart.

Superior Vena Cava

A large vein that carries deoxygenated blood from the upper half of the body to the heart.

Inferior Vena Cava

The large vein that carries deoxygenated blood from the lower and middle body into the right atrium of the heart.

Pulmonary Artery

The blood vessel that transports blood lacking oxygen from the heart's right ventricle to the lungs to receive oxygen.