The preferred cost allocation base that can be used to allocate central corporate support costs to products is ________.
A) sales
B) cost of goods sold
C) total assets
D) a measure of usage

Question

Quizplus · Accepted Answer

Allocating central corporate support costs based on a measure of usage is the most appropriate and accurate method. This could be the number of hours departments or products use the corporate services or the percentage of resources they consume. Allocating based on sales, cost of goods sold, or total assets can be misleading as these factors may not directly relate to the usage of corporate services.

The Preferred Cost Allocation Base That Can Be Used to Allocate