Q604
Method which ranks cost object incurred by individual users, in ranking order of more responsible users is classified as
A.
bundled products allocation method
B.
variable cost allocation method
C.
stand-alone cost allocation method
D.
incremental cost allocation method
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Method which ranks cost object incurred by individual users, in ranking order of more responsible users is classified as incremental cost allocation method. Cost allocation methods are designed to allocate costs not necessarily associated with a product, to the appropriate products to get a realistic estimate of costs so that a proper price can be determined for a particular product.