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Which is true about cost allocation

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Reference no: EM132598489

Question 1: Which of the following is true about cost allocation?

A. Insulating allocations cause one manager's performance to be adjusted by another manager's performance.

B. When a insulating allocation base is used to allocate common costs, the allocation base will not fluctuate with other subunits' performance.

C. Noninsulating cost allocations can reduce the risk managers bear by making planning more clear..

D. Whenever interaction is important, common costs should be allocated using a base that does insulate subunits.

Reference no: EM132598489

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