5510816
Description
Quiz by amanda.padilla, updated more than 1 year ago
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Created by amanda.padilla
over 8 years ago
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Question 1
Question
To discourage unnecessary use of a support department, management might ________.
Answer
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allocate user department costs based upon support department usage
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allocate support department costs based upon user department usage
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allocate a fixed amount of support department costs to each and every department
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allocate a fixed amount of user department costs to each and every department
Question 2
Question
The biggest advantage of using practical capacity to allocate costs is that it ________.
Answer
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focuses the user's division with the costs of overused capacity
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never causes over or under-allocated overhead
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burdens the user divisions with the costs of unused capacity
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focuses management's attention on unused capacity
Question 3
Question
The method that allocates costs by explicitly including all the services rendered among all support departments is the ________.
Answer
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direct method
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step-down method
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reciprocal method
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sequential method
Question 4
Question
A cost of operating a facility, department, activity area, or like cost object that is shared by two or more users is called a ________.
Answer
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combined cost
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distinct cost
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fixed cost
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common cost
Question 5
Question
Contract disputes regarding cost allocation can be reduced by defining ________.
Answer
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the material items allowed for production
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the terms used, such as what constitutes direct
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permissible tax deductions
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minimum profit level the company should earn
Question 6
Question
Tours Corp offers towing services, auto routing, travel brochures, and other travel services for one annual fee. This is an example of ________.
Answer
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revenue tracing
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revenue allocation
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a bundled product
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a business conglomerate
Question 7
Question
The method that ranks individual products in a bundle for revenue allocation is the ________.
Answer
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stand-alone revenue-allocation method
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incremental revenue-allocation method
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unit-cost weighting method
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physical-unit weighting method
Question 8
Question
Which of the following is a disadvantage of a dual-rate method?
Answer
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It allocates fixed costs on the basis of budgeted long-run usage may tempt some managers to underestimate their planned usage.
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It may lead operating department managers to make sub-optimal decisions that are in their own best interest.
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It allocates fixed and variable-cost pool using the same cost-allocation base, which will mislead managers in making decisions.
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It does not guide department managers to make decisions that benefit both the organization as a whole and each department.
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