The objective of allocating all costs to producer is to?
Answer Details
The objective of allocating all costs to producer is to compute the contribution of the product to the final profit. By allocating all costs to the producer, a company can determine the total cost of producing a product, including both direct and indirect costs. This information can then be used to calculate the contribution margin, which is the amount of money left over after deducting all costs directly related to the production of the product. This contribution margin is a key indicator of the product's profitability, as it shows how much money the product is contributing towards the company's overall profit. Allocating all costs to the producer helps ensure that the contribution margin is accurate and reflects all of the costs associated with producing the product.