The underlying principle of allocating operating expenses to departments is to assign each department an amount of expense proportional to the revenues of that department.

Question

Quizplus · Accepted Answer

While revenue may be one factor in allocating operating expenses, there are many other factors such as the number of employees in a department, the square footage of the department's workspace, or the amount of resources that are utilized by the department. Therefore, it is not always proportional to revenues.

The Underlying Principle of Allocating Operating Expenses to Departments Is