All possible sequences of service department allocations should be computed. The sequence that provides the largest allocation of service costs should then be selected. The allocation base should have an indirect association with the cost objective. The allocation base should be difficult to measure. There should be logical association between the allocation base and the incidence of costs. The allocation base should be out of the control of management.

The sequence of allocation generally starts with the service department that has incurred the…

Answered: All possible sequences of service…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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All possible sequences of service department allocations should be computed. The sequence that provides the largest allocation of service costs should then be selected.

		The allocation base should have an indirect association with the cost objective.
		The allocation base should be difficult to measure.
		There should be logical association between the allocation base and the incidence of costs.
		The allocation base should be out of the control of management.

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