The stand-alone method of allocating common costs emphasises fairness and equity among users.

Question

Quizplus · Accepted Answer

The stand-alone method of allocating common costs is designed to ensure fairness and equity by assigning costs based on the actual usage or consumption of resources by each individual user, rather than allocating costs based on size, revenue or some other arbitrary measure. This method works well for companies where each department or product line has a clear cost centre and can be easily identified and tracked. By allocating common costs based on usage, each department or product line only pays for the resources it actually consumes, which can be seen as fair and equitable.

The Stand-Alone Method of Allocating Common Costs Emphasises Fairness and Equity