Question

The stand minus −alone cost allocation method ranks the individual users of a cost object in order of users most responsible for a common cost and then uses these rankings to allocate the costs among the users.
A. True
B. False

Answer 1

Answer:

False

Explanation:

It is 'Incremental cost allocation method' that ranks the individual users of a cost object in order of users most responsible for a common cost (the most responsible will be primary user) and then uses these rankings to allocate the costs among the users (incremental users).

Stand-alone cost allocation method allocates cost proportionately among all users based on a basis which relates to each users proportion of the total. For example the basis could be proportion of sales of responsibility centers to total sales of organization.

Hence the statement is false.