Which of the following illustrates a purpose for allocating costs to cost objects?
A)to motivate managers and employees
B)to provide information to customers
C)to determine a selling price the market will bear
D)to measure liabilities

Question

Quizplus · Accepted Answer

Allocating costs to cost objects can serve as a motivational tool for managers and employees, as it allows them to see the impact of their actions on costs and profitability. This can encourage them to find ways to reduce costs and improve efficiency. The other options are not purposes for allocating costs to cost objects: providing information to customers would usually involve communicating the cost to the customer, rather than allocating it to a cost object, determining a selling price is influenced by market factors rather than cost allocation, and measuring liabilities is a separate accounting function.

Which of the Following Illustrates a Purpose for Allocating Costs