What is cost allocation? Why do companies choose particular allocation methods? Can all costs be allocated using the same cost driver? Why or why not? Why do we need it$?$ Please give a few examples.

Prompt $2$: Why should unit cost data be frequently interpreted with caution? What factors should be taken into account?

Prompt $3$: What are cost behaviors? How do we know if a cost is direct or indirect? Please give some examples to illustrate different types of costs.

Prompt $4$: Please explain how manufacturing, merchandising and service companies differ. What costs will they each have and why?

 

 

Answer rating: 100% (QA)

Cost Allocation Cost allocation is the process of assigning indirect costs to products services or departments based on a reasonable allocation method Companies choose particular allocation methods to ... View the full answer