An allocation base for a cost pool should ideally be:
A) machine hours.
B) a cost object.
C) a common cost.
D) a cost driver.
E) direct labor, either cost or hours.

Question

Quizplus · Accepted Answer

A cost driver is the most appropriate allocation base for a cost pool because it has a direct cause-and-effect relationship with the costs in the pool, ensuring that costs are allocated based on actual resource consumption.

An Allocation Base for a Cost Pool Should Ideally Be