Final answer:
Cost allocation decisions indeed can affect employee motivation as they influence the evaluation of departments and can motivate or demotivate employees depending on the perceived fairness of the allocation process.
Step-by-step explanation:
Cost allocation decisions can affect employee motivation, which is true. Cost allocation involves the distribution of indirect costs to different departments or products within a business. The way these costs are allocated can impact how a department is evaluated and can influence the behavior of managers and employees. If employees perceive the allocation method to be unfair, it may demotivate them. Alternatively, a fair and transparent allocation process can motivate employees by aligning their interests with the company's financial goals.