When choosing a cost allocation method:
A) Any method that does not distort cost is best
B) The most complex method is usually best
C) The simplest method with least distortion of cost is best
D) No method is better than any other method

Question

Quizplus · Accepted Answer

The simplest method with the least distortion of cost is best because it is easier to understand and implement. Additionally, it typically results in the most accurate allocation of costs to specific products, services, or departments. Complexity may actually introduce errors or inaccuracies into the process.

When Choosing a Cost Allocation Method