Cost Allocation Techniques Paper 8


The two most appropriate factors for budgeting manufacturing overhead expenses would be


When allocating service department costs to production departments, the method that does not consider different cost behavior patterns is the


There are several methods for allocating service department costs to the production departments. The method that recognizes service provided by one service department to another but does not recognize reciprocal interdepartmental service is the


A large manufacturing company has two service departments and two production departments. Each of the service departments renders services to each other and to the two production departments. Which one of the following methods would most accurately allocate the costs of the service departments to the production departments of this company?


Allocation of service department costs to the production departments is necessary to


When allocating service and administrative costs, the least useful criterion as a basis for allocation is


A corporation allocates indirect corporate overhead costs to its operating divisions. The company uses a cause-and-effect criterion in the selection of appropriate allocation bases. Which of the following would be an appropriate allocation base to assign the costs of the corporate personnel department to the operating divisions using a cause-and-effect criterion?


When allocating costs from one department to another, a dual-rate cost-allocation method may be used. The dual-rate cost-allocation method is most useful when


The management of ROX Company wishes to encourage all other departments to use the legal department, as circumstances warrant. To accomplish this, legal department costs should be


Boston Furniture Company manufactures several steel products. It has three production departments: Fabricating, Assembly, and Finishing. The service departments include Maintenance, Material Handling, and Designing. Currently, the company does not allocate service department costs to the production departments. John Baker, who has recently joined the company as the new cost accountant, believes that service department rates should be developed and charged to the production departments for services requested. If the company adopts this new policy, the production department managers would be least likely to


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