The correct answer is: First incremental party.
The incremental method is a method of allocating common costs to products or services. It is based on the idea that the cost of a product or service is the sum of the costs of its inputs, plus the costs of any activities that are specific to that product or service.
The first incremental party is the party that receives the highest ranking in the allocation of common costs. This is because the first incremental party is the party that is most responsible for the costs of the product or service.
The second incremental party is the party that receives the second highest ranking in the allocation of common costs. This is because the second incremental party is the party that is second most responsible for the costs of the product or service.
The third incremental party is the party that receives the third highest ranking in the allocation of common costs. This is because the third incremental party is the party that is third most responsible for the costs of the product or service.
The primary party is the party that is responsible for the majority of the costs of the product or service. The primary party is not necessarily the first incremental party.
The following is a brief explanation of each option:
- A. Third incremental party. The third incremental party is the party that receives the third highest ranking in the allocation of common costs. This is because the third incremental party is the party that is third most responsible for the costs of the product or service.
- B. Second incremental party. The second incremental party is the party that receives the second highest ranking in the allocation of common costs. This is because the second incremental party is the party that is second most responsible for the costs of the product or service.
- C. Primary party. The primary party is the party that is responsible for the majority of the costs of the product or service. The primary party is not necessarily the first incremental party.
- D. First incremental party. The first incremental party is the party that receives the highest ranking in the allocation of common costs. This is because the first incremental party is the party that is most responsible for the costs of the product or service.