Examlex

Solved

How Do Companies Decide What Allocation Bases to Use to Allocate

question 102

Essay

How do companies decide what allocation bases to use to allocate indirect costs to departments?


Definitions:

Utility

Utility refers to the total satisfaction received from consuming a good or service.

Diminishing Utility

The principle that as consumption of a good or service increases, the marginal utility derived from each additional unit decreases.

Marginal Utility

The additional satisfaction or benefit obtained from consuming one more unit of a good or service.

Total Utility

The complete satisfaction obtained from consuming a particular quantity of goods or services.

Related Questions