(CPA)Which of the Following Statements Is True About Support Cost

question 34

Multiple Choice

(CPA) Which of the following statements is true about support cost allocation?

• A)Companies can maximize or minimize their income by selecting different allocation bases for support costs
• B)Companies can select allocation bases to raise or lower reported income on given products
• C)Companies' total incomes will remain unchanged no matter how support costs are allocated
• D)Companies should usually allocate support costs randomly or based on an ability-to-bear criterion

---

Definitions:

Process Engineer

A professional who designs, implements, controls, and optimizes industrial processes, especially continuous ones within the chemical, energy, or manufacturing sectors.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing a more accurate reflection of the costs incurred.

Highlight

A highlight is a feature or element that is emphasized or made more noticeable, often used to draw attention to a specific point or detail.

Cost of Services

Expenses directly related to the delivery of services, including labor, materials, and overhead costs.