The cost allocation base ________.
A) is a grouping of individual indirect cost items
B) are costs related to a particular cost object that cannot be traced to that cost object in an economically feasible way
C) is anything for which a measurement of costs is desired
D) is a systematic way to link an indirect cost or group of indirect costs to cost objects

Question

Quizplus · Accepted Answer

The cost allocation base is used as a link between indirect costs and cost objects. It is a systematic way to allocate indirect costs that cannot be traced economically to cost objects. Options A and C do not accurately describe the cost allocation base, and option B describes indirect costs rather than the allocation base itself.

The Cost Allocation Base ________