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

Question

Quizplus · Accepted Answer

The allocation of costs to various cost objects can affect both managers' performance evaluation and the apparent profitability of the various products a company makes. When costs are allocated to different products, it can affect how much profit each product shows. This, in turn, can influence managers' performance evaluation, as managers may be evaluated on how well their products perform. Therefore, the best choice is D.

Allocation of Costs to Various Cost Objects May