A company with three products classifies its costs as belonging to five functions: design, production, marketing, distribution, and customer services. For pricing purposes, all company costs are assigned to the three products. The direct costs of each of the five functions are traced directly to the three products. The indirect costs of each of the five business functions are collected into five separate cost pools and then assigned to the three products using appropriate allocation bases. The allocation base that would most likely be the best for allocating the indirect costs of the distribution function is
　　A. Number of salespersons.
　　B. Number of customer phone calls.
　　C. Number of shipments.
　　D. Dollar sales volume.
　　Answer:C
　　C is corrent. The number of shipments would be an appropriate base because there could be a cause and effect relationship between the number of shipments and distribution costs.
　　A is incorrect. The number of salespersons would not be a good allocation base because this allocation base is not related to distribution costs. Thus, the cause and effect criteria would not be satisfied.
　　B is incorrect. The number of customer phone calls would not be a good allocation base because this base would have little relation to distribution costs. Thus, the cause and effect criteria would not be satisfied. The number of customer phone calls probably would be more closely related to the customer service function.
　　D is incorrect. The dollar sales volume would not be a good allocation base because the dollar value of the sale would not necessarily be related to the distribution costs. Thus, the cause and effect criteria would not be satisfied.