The dual-rate cost-allocation method classifies costs in each cost pool into a ________.
A) budgeted-cost pool and an actual-cost pool
B) variable-cost pool and a fixed-cost pool
C) direct-cost pool and an indirect-cost pool
D) direct-cost pool and a reciprocal-cost pool

Question

Quizplus · Accepted Answer

The dual-rate cost-allocation method separates costs into variable and fixed categories. This allows for more accurate allocation of costs to various cost objects based on their actual usage (variable costs) and their capacity or availability (fixed costs), rather than treating all costs as behaving the same way.

The Dual-Rate Cost-Allocation Method Classifies Costs in Each Cost Pool