This seems like a relatively easy question but to me it's confusing based on what was said in the Becker lecture:
Costs are allocated to cost objectives in many ways and for many reasons. Which one of the following is a purpose of cost allocation?
A. Evaluating revenue center performance.
B. Measuring income and assets for external reporting.
C. Budgeting cash and controlling expenditures.
D. Aiding in variable costing for internal reporting.
The answer is B, measuring income and assets for external reporting.
The reason why I'm confused about this is because, when doing the Becker lecture (B3-M2), they made a point that the objective of cost accounting is to aid in internal decision making, so my question is why would cost allocation have anything to do with external reporting?
Thanks, long time follower, first time poster. Fed up with Becker's answer explanations/lectures that seemingly have nothing to do with the questions asked.