Allocating indirect costs to departments based on the relative revenue earned by those departments is done based on which of the following criterion?
A) direct hours utilized
B) benefits received
C) material resources used
D) cause-and-effect relationships

Question

Quizplus · Accepted Answer

Allocating indirect costs based on the relative revenue earned by departments aligns with the benefits received criterion. This method assumes that departments that generate more revenue benefit more from the indirect costs.

Allocating Indirect Costs to Departments Based on the Relative Revenue