The cost allocation method most widely used because of its accuracy and ability to provide a detailed level of analysis is: Joint product costing. Accounting approach. Activity-based approach. Direct approach. Departmental approach.

Activity-based approach.

Explanation:

Cost allocation in financial accounting can be defined as the process of identifying, gathering and assigning of cost across multiple cost objects such as products, inventory or departments.

There are various types of cost allocation methods and these are;

1. Sequential method.

2. Activity-based management method.

3. Reciprocal services method.

4. Direct method.

The cost allocation method most widely used because of its accuracy and ability to provide a detailed level of analysis is activity-based approach.

This ultimately implies that, activity-based approach gives entrepreneurs or employers all the necessary information on the actual cost of manufacturing, service delivery and other tasks associated with the business. Under the activity-based approach, the relationship between time and cost measurement is used to determine the cost price of goods and services.

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