The most important criterion in accurate cost allocations is:
A) Using a simple allocation method.
B) Allocating fixed and variable costs by using the same allocation base.
C) Using homogeneous cost pools.
D) Using multiple drivers for each cost pool.

Question

Quizplus · Accepted Answer

Homogeneous cost pools ensure that only similar costs are grouped together, making the allocation more accurate by matching costs more closely with their cause or driver.

The Most Important Criterion in Accurate Cost Allocations Is