Which is not a reason for allocating internal costs to cost objects? Managers should be charged for benefits received by departments (or products) under their control To determine the amount to be reimbursed under a cost-reimbursement contract To determine the selling price of products All of the above are reasons for allocating internal costs to cost objects US GAAP requires allocation of factory overheads

Question

Business

Zain

26 May, 08:40

Which is not a reason for allocating internal costs to cost objects? Managers should be charged for benefits received by departments (or products) under their control To determine the amount to be reimbursed under a cost-reimbursement contract To determine the selling price of products All of the above are reasons for allocating internal costs to cost objects US GAAP requires allocation of factory overheads

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Adrienne Murray · Answer 1

The reason which is not used for allocating the internal costs to the cost objects is to measure the selling price of the products.

Explanation:

Internal cost is the cost on which the businesses or company bases its price on which involve costs such as energy, plant, equipments and materials.

Cost objects is the department or the product for which costs are evaluated or measured. For example, a product is the cost object for direct labor and direct materials.

And the reason which is not used for allocating the internal cost to the cost objects is the evaluation of the selling price of the product as in a market, selling prices are determined or set by the demand and the supply factor.