According to incremental method, the party which receives the highest ranking in allocation of common cost is classified as ____________?
Correct answer: C. primary party
- A. Third incremental party
- B. second incremental party
- C. primary party
- D. First incremental party
Explanation
In the incremental allocation method, the party ranked first is the primary party, while later parties are called incremental parties. The highest-ranked party therefore receives the primary classification.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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