Question

In refining a cost system

A. total direct costs are unchanged because they can be traced in an economically feasible way to the product and traced costs are more accurate.

B. the costs are grouped in homogeneous pools of the same or similar amounts.

C. the criterion of cause-and-effect is used to relate indirect costs to a factor that systematically links to a cost object.

D. the organization looks for cost-allocation bases that will provide a uniform spreading of indirect costs to each product.

Answer 1

In refining a cost system, indirect costs are allocated based on a factor that systematically links to the cost object.

Step-by-step explanation:

In refining a cost system, the organization looks for cost-allocation bases that will provide a uniform spreading of indirect costs to each product. This means that indirect costs, which cannot be directly traced to a product, are allocated based on a factor that systematically links to the cost object.