Which of the Following Statements Regarding the Two-Stage Cost Allocation

question 76

Multiple Choice

Which of the following statements regarding the two-stage cost allocation process is (are) false? (A) If a company has three cost pools,then it should also have three different cost allocation bases.(B) The selection of an appropriate cost allocation base is more important for single-stage cost allocation systems than for two-stage cost allocation systems.

• A) Only A is false.
• B) Only B is false.
• C) Both A and B are false.
• D) Neither A nor B is false.

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Definitions:

Income

Funds received routinely through work or investing activities.

Income Elasticity

An indicator of the degree to which demand for a product or service shifts following a variation in consumer income.

Housing

The provision of accommodation, typically through buildings or structures where individuals or families live.

Income Increase

A rise in the amount of money earned by an individual or collected by an organization, often measured on a monthly or yearly basis.