Common allocation bases are
A) direct labor dollars,direct labor hours,direct material dollars
B) direct labor dollars,direct labor hours,machine hours
C) direct labor dollars,direct labor hours,machine dollars
D) machine dollars,direct labor dollars,direct labor hours

Question

Quizplus · Accepted Answer

Direct labor dollars, direct labor hours, and machine hours are all common allocation bases used in costing systems. Direct material dollars are not always used, as some companies may have automated production processes where material costs are not a significant factor in product costs. Machine dollars do not accurately reflect the usage of machines, as some machines may be more efficient or have higher operating costs than others. Thus, direct labor dollars, direct labor hours, and machine hours provide a more accurate basis for cost allocation.

Common Allocation Bases Are