Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 5 - Activity-Based Costing and Activity-Based Management - Assignment Material - Questions - Page 177: 5-1

Answer

Broad averaging is a cost allocation method that uses a single average rate for all cost objects. It simplifies allocation but can lead to imprecise cost information, cross-subsidization, and ineffective decision-making.

Work Step by Step

Broad averaging is a cost allocation method that uses a single average rate for all cost objects. It simplifies allocation but can lead to imprecise cost information, cross-subsidization, and ineffective decision-making.
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