An allocation base may also be referred to as a:
A) cost object.
B) common cost.
C) cost driver.
D) joint base.

Question

Quizplus · Accepted Answer

An allocation base is also referred to as a cost driver because it drives the cost allocation process by determining the amount of costs that should be allocated to each cost object. Cost object (A) refers to anything for which a separate measurement of costs is desired, while a common cost (B) is a cost that is incurred for the benefit of multiple cost objects and cannot be traced directly to any of them. Joint base (D) is not a commonly used term in cost accounting.

An Allocation Base May Also Be Referred to as A