What should determine whether an allocation base is a good cost driver?

Question

Quizplus · Accepted Answer

The best determinant of a good cost driver is the presence of a cause-and-effect relationship between the allocation base and the overhead cost. This means that changes in the allocation base should correspond to changes in the overhead cost, which can help in accurately assigning costs to different products or services. The accuracy of measurement is important, but not as critical as the cause-and-effect relationship. The ability to apply the base plantwide or measure it in terms of hours is not as relevant in determining the quality of a cost driver.

What Should Determine Whether an Allocation Base Is a Good