An allocation base for a cost pool should ideally be:
a. a cost driver.
b. a cost object.
c. a common cost.
d. machine hours.
e. direct labor, either cost or hours.
Question text
The most valid reason for using something other than a full-cost-based transfer price between units of a company is because a full-cost price
a. does not reflect the excess capacity of the supplying unit.
b. is not available unless market-based prices are available.
c. does not ensure the control of costs of a supplying unit.
d. is typically more costly to implement.
Question text
