To Guide Cost Allocation Decisions, the Ability to Bear Criterion

question 70

Multiple Choice

To guide cost allocation decisions, the ability to bear criterion ________.

• A) is the primary criterion used in activity-based costing
• B) allocates cost among the beneficiaries in proportion to the benefits each receives.
• C) results in subsidizing products that are not profitable
• D) is used more frequently than any other criteria

---

Definitions:

Equilibrium Price

The price point at which the demand for a product matches the supply of the product, ensuring market stability.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specified period.

Binding Constraint

A restriction or limitation that affects the feasibility or optimization of a decision or system.

Market Equilibrium

A state where the quantity of goods or services supplied is equal to the quantity demanded at a particular price.