A large percentage of companies use sales revenue as a cost allocation base for allocating central corporate costs.Sales revenue is ________.
A)usually the cost driver
B)unlikely to be the cost driver
C)usually the activity that causes central corporate costs
D)none of the above

Question

Quizplus · Accepted Answer

Sales revenue is not necessarily the cost driver for central corporate costs, as these costs are usually not directly related to revenue-generating activities. Other cost allocation bases, such as number of employees or square footage of facilities, may be more appropriate.

A Large Percentage of Companies Use Sales Revenue as a Cost