One purpose of cost allocations is to justify costs to establish a "fair" price, often required by law and government contracts.

Question

Quizplus · Accepted Answer

Cost allocations help to distribute costs accurately and fairly among different departments or products. This fair distribution of costs ultimately helps in justifying the prices charged to customers or clients, which is often required by law and government contracts. Therefore, the statement is true.

One Purpose of Cost Allocations Is to Justify Costs to Establish