Under the stand-alone method of allocating common costs ________.
A) the individual users of a cost object are ranked in the order of users least responsible for the common cost and then uses this ranking to allocate cost among those users
B) disputes can arise over who is the primary user
C) each party bears a proportionate share of the total costs in relation to their individual stand-alone costs
D) the individual users of a cost object are ranked in the order of users most responsible for the common cost and then uses this ranking to allocate cost among those users

Question

Quizplus · Accepted Answer

Under the stand-alone method of allocating common costs, each party bears a proportionate share of the total costs in relation to their individual stand-alone costs. This method is considered fair and objective as it distributes costs based on the actual amount of resources used by each party. This method does not rank individuals based on their responsibility or primary usage, which makes it simpler and eliminates disputes over who the primary user is.

Under the Stand-Alone Method of Allocating Common Costs ________