Why is the cost$-$allocation method used by an organization an important part of its cost accounting system?

A$.$ Companies must assign all non$-$production costs to inventory for external financial reporting purposes, therefore the method chosen will be important for accurate reporting of results.

B$.$ The method an organization chooses cannot be changed once elected, therefore it is critical to choose the correct method during the product planning stages.

C$.$ For all companies, accountants can directly trace more than $80\%$ of operating costs to products, services, and customers.

D$.$ For most companies, accountants can directly trace less than $60\%$ of operating costs to products, services, and customers. For the rest of a company's costs, accountants must either apply cost$-$allocation methods or leave costs unallocated. Most managers prefer to allocate these indirect costs.