The method which ranks cost object incurred by individual users, in ranking order of more responsible users is classified as ___________?
Correct answer: D. incremental cost allocation method
- A. bundled products allocation method
- B. variable cost allocation method
- C. stand-alone cost allocation method
- D. incremental cost allocation method
Explanation
The incremental cost allocation method ranks users by responsibility for the cost and allocates it in that order. The stand-alone method instead calculates each user's cost as though it operated independently.
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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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