Author Question: When individual activities within a cost pool have a similar relationship with the cost driver, ... (Read 24 times)

shofmannx20 · **on:** Mar 6, 2021

Question 1

To allocate corporate costs to divisions, the ideal situation would be for the allocation base to ________.
◦ be an output unit-level base
◦ have the best cause-and-effect relationship with the costs
◦ combine administrative costs and human resource management costs
◦ allocate the fixed costs only

Question 2

When individual activities within a cost pool have a similar relationship with the cost driver, which of the following could be said about the cost pool?
◦ the costs accumulated in the cost pool are not used for customer-profitability analysis
◦ there is a need for need multiple cost drivers to allocate costs from the pool to customers
◦ the cost pool is considered a homogeneous cost pool
◦ the cost pool is considered contains only direct variable costs

mirabriestensky · **Reply #1 on:** Mar 6, 2021

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