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For each item listed, select the appropriate purpose of cost allocation from the list below. A purpose may be used more than once. A -

For each item listed, select the appropriate purpose of cost allocation from the list below. A purpose may be used more than once.

A - To provide information for economic decisions

B - To motivate managers and other employees

C - To measure income and assets for reports to external parties

D - To justify costs or compute reimbursement amounts

Required

  1. To encourage simpler product design
  2. To cost inventories for reporting on a company's tax return
  3. To encourage the sales department to focus on high-margin products
  4. To evaluate a make or buy decision
  5. To cost inventories for the balance sheet
  6. To decide whether to add or delete a product line
  7. To decide on an appropriate selling price for a special-order product
  8. To cost a product at a fair price for government contracts

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