The use of dual rates in a cost allocation system assumes that common costs can be:
A) separated into their fixed and variable components.
B) traced directly to a specific division or manager.
C) allocated based on a physical quantities measure.
D) assigned to an investment responsibility center.

Question

Quizplus · Accepted Answer

Dual rates separate costs into fixed and variable components, allowing for more accurate allocation based on the nature of the costs.

The Use of Dual Rates in a Cost Allocation System