Which one of the following statements best describes cost allocation? A company can maximize total company income

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Which one of the following statements best describes cost allocation?

A company can maximize total company income by selecting different bases to allocate indirect costs.

A company should select an allocation base to raise or lower reported income on given products.

A company’s total income will remain unchanged no matter how indirect costs are allocated.

A company, as a general rule, should allocate indirect costs randomly or based on an

‘‘ability-to-bear”’ criterion.

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Related Book For  book-img-for-question

Cost Accounting Concepts And Applications For Managerial Decision Making

ISBN: 9780070103108

2nd Edition

Authors: Ralph S. Polimeni, James A. Cashin, Frank J. Fabozzi, Arthur H. Adelberg

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