In determining the amount of indirect costs to be allocated to the cost object the first step is:
A) to develop a cost allocation formula
B) to decide on the number of cost pools
C) to select a cost driver
D) to develop a predetermined cost rate

Question

Quizplus · Accepted Answer

The first step in allocating indirect costs is to decide on the number of cost pools, which helps in organizing and categorizing costs before selecting cost drivers and developing allocation formulas.

In Determining the Amount of Indirect Costs to Be Allocated