Allocation of costs to various cost objects may affect:
A) managers' performance evaluation.
B) the overall profitability of a company.
C) the apparent profitability of the various products a company makes.
D) managers' performance evaluation and the apparent profitability of the various products a company makes.

Question

Quizplus · Accepted Answer

Allocation of costs to various cost objects can affect both the managers' performance evaluation and the apparent profitability of the various products a company makes. When costs are allocated in different ways, it can change how much profit certain products appear to be making, which could affect decisions around product pricing, production, and investment. Additionally, if managers are evaluated based on certain metrics that are affected by cost allocation, it could impact their performance evaluations. The overall profitability of a company could also be affected by cost allocation, but it is not necessarily directly impacted.

Allocation of Costs to Various Cost Objects May Affect