Regardless of the system used in departmental cost analysis: Multiple Choice Direct costs are allocated, indirect costs are not. Indirect costs are allocated, direct costs are not. Both direct and indirect costs are allocated. Neither direct nor indirect costs are allocated. Total departmental costs will always be the same

Question

Alannah Solomon

Business

18 August, 01:44

Regardless of the system used in departmental cost analysis: Multiple Choice Direct costs are allocated, indirect costs are not. Indirect costs are allocated, direct costs are not. Both direct and indirect costs are allocated. Neither direct nor indirect costs are allocated. Total departmental costs will always be the same

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Answers (1)

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Ruby Hicks · Answer 1

Direct costs are allocated

Explanation:

Direct Costs can be traced to a particular department and are therefore allocated to it.

However Indirect costs have to be apportioned using cost drivers or surrogates to the department as they can not be traced directly to a particular department.