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NEW QUESTION: 1
A. Option A
B. Option B
C. Option C
D. Option D
Answer: B
NEW QUESTION: 2
Which of the following professional organizations sets standards for quality and environmental audits?
A. The International Organization of Supreme Audit Institutions.
B. The Board of Environmental, Health, and Safety Auditor Certifications.
C. The International Standards Organization.
D. The Committee of Sponsoring Organizations of the Treadway Commission.
Answer: C
NEW QUESTION: 3
Cost allocation is the process of assigning indirect costs to a cost object. The indirect costs are grouped in cost pools and then allocated by a common allocation base to the cost
object. The base that is employed to allocate a homogeneous cost pool should.
A. Assign the casts in the pool uniformly to cost objects even if the cost objects use resources in a non uniform way.
B. Be a nonfinancial measure e.g., number of setups) because a nonfinancial measure is more objective.
C. Have a high correlation with the cost items in the cost pool as the sole criterion for selection.
D. Have a cause-and-effect relationship with the cost items in the cost pool.
Answer: D
Explanation:
A cost allocation base is the common denominator for systematically correlating indirect costs and a cost object. The cost driver of the indirect costs is ordinarily the allocation base. In a homogeneous cost pool, all cost should have the same or a similar cause-andeffect relationship with the cost allocation base.
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