Which of the following statements is true about support cost allocation?
A) Companies can maximize or minimize their income by selecting different allocation bases for support costs.
B) Companies can select allocation bases to raise or lower reported income on given products.
C) Companies' total incomes will remain unchanged no matter how support costs are allocated.
D) Companies should usually allocate support costs randomly or based on an ability-to-bear criterion.

Question

Quizplus · Accepted Answer

Companies' total incomes remain unchanged regardless of how support costs are allocated because allocation merely distributes costs among different departments or products without affecting the total amount of costs incurred by the company.

Which of the Following Statements Is True About Support Cost