While allocating corporate costs to divisions ________.
A) only fixed costs should be allocated
B) no homogeneous cost pools should be constructed
C) all the costs in the cost pool should not have the same or a similar cause-and-effect or benefits-received relationship with the cost-allocation base
D) allocate both variable and fixed costs to divisions and then to customers

Question

Quizplus · Accepted Answer

Allocating both variable and fixed costs to divisions and then to customers ensures that the full cost of operating the divisions is captured. This approach provides a more comprehensive view of the costs associated with each division and allows for better decision-making regarding pricing, budgeting, and resource allocation.

While Allocating Corporate Costs to Divisions ________