A cost hierarchy describes
A)a technique for direct cost tracing.
B)the process of arranging costs by importance.
C)the logic of segregating costs by value-chain classification.
D)the logic of separating one indirect cost pool into multiple pools according to activity level.
E)a technique of differentiating fixed and variable costs.

Question

Quizplus · Accepted Answer

A cost hierarchy involves segregating one indirect cost pool into multiple pools based on activity level, which allows for more accurate cost allocation and decision-making.

A Cost Hierarchy Describes