In the Mechanics of Process Costing, Why Is an Allocation

Multiple Choice

In the mechanics of process costing, why is an allocation that computes costs based on the number of physical units not accurate?

A) A number based on physical units does not include fixed costs.
B) A number based on physical units does not include overhead costs.
C) It attaches too much variable costs to each unit.
D) It attaches the same value to a unit whether the unit is in process or is complete.
E) None of the above.