The First Step,from Those Below,in the Process of Allocating Indirect

question 62

Multiple Choice

The first step,from those below,in the process of allocating indirect costs is to:

• A) identify a cost driver that has a strong correlation to the cost pool.
• B) calculate the indirect cost rate per cost driver.
• C) determine the number of indirect cost pools.
• D) allocate the indirect costs to each cost object.

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Definitions:

Liabilities

Financial obligations or debts owed by a company or individual.

Benefits-Received Principle

The concept that individuals should be taxed in proportion to the benefits they receive from government services.

Taxpayer Contributions

Monies paid into a government treasury by individuals or businesses for public use and services.

Public Expenditures

Money spent by the government on various services and projects for the public good.