1. In the context of allocating support department costs to production departments, which of the following methods is the easiest but the least accurate? a. Step-down method b. Reciprocal services method c. Sequential method d. Direct method 2. In the context of allocating support department costs to production departments, which of the following methods is the most difficult but the most accurate? a. Reciprocal services method b. Step-down method c. Direct method d. Sequential method considers all inter-support- 3. In the context of allocating support department costs to production departments, the department services and is the most difficult to implement when a large number of departments is involved.

1. In the context of allocating support department costs to production departments, which of the following methods is the easiest but the least accurate? a. Step-down method b. Reciprocal services method c. Sequential method d. Direct method 2. In the context of allocating support department costs to production departments, which of the following methods is the most difficult but the most accurate? a. Reciprocal services method b. Step-down method c. Direct method d. Sequential method considers all inter-support- 3. In the context of allocating support department costs to production departments, the department services and is the most difficult to implement when a large number of departments is involved.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following statements is false about the order in which management determines the sequencing of support department allocations under the sequential method of allocating support department costs to production departments? a.Departments with higher costs are allocated earlier. b.Departments serving a large number of support departments are allocated earlier. c.Departments with more employees are allocated earlier. d.Departments with more accurate cost drivers are allocated earlier.
Which of the following is TRUE regarding the total service department cost allocated by the three recognized allocation method? O The reciprocal method results in the highest amount of total cost being allocated to operating departments as it recognizes all possible interactions among the support departments prior to allocation. O The answer will depend on how many service departments are involved in supporting operating departments. O The step method results in more total cost being allocated to operating departments than the direct method as it recognizes at least some portion of interactions among the support departments. O There is no difference among the three methods in terms of total cost being allocated to operating departments. blout
Which one of the following is not a step in allocating the support department cost to the production department? Select one: a. Trace all the overhead cost b. Divide the departments in to support and producing departments c. Undertake a breakeven analysis d. Divide the company in departments
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What are support departments, and why are their costs allocated to other departments? What process is used to allocate support department costs?
which cost allocation method to use to serve better support direct cost to producing departments?
Activity-based costing (ABC) is a costing technique that uses a two-stage allocation process. Which of the following statements best describes these two stages? Multiple Choice Direct costs are allocated to the production departments based on a predetermined overhead rate. The costs are assigned to departments, and then to the products based upon their use of activity resources. The costs are assigned to activities, and then to the products based upon their use of the activities. Indirect costs are assigned to activities, and then to the products based upon the direct cost resources used by the activities.
Which of the following descriptions could be applied to the IT costs in question four? ( previous question) a. Afixedproductionexpenseb. Asemi-variableadministrationoverhead c. A variable direct research expensed. A mixed direct labour distribution cost