ch12 - ch12 Student: _ 1. The objectives of cost allocation...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
ch12 Student: ___________________________________________________________________________ 1. The objectives of cost allocation are simply to: A. Motivate, provide incentive, and determine fair awards. B. Accurately define, divide and spread direct costs. C. Value, measure, and interpret cost data. D. Connect, communicate, and discern information. E. Define, refine, and re-define indirect costs. 2. A key motivation issue in cost allocation is controllability, which means that costs not under at least some control of the manager should: A. Be charged against the manager's operations. B. Be identified with the management level that causes them. C. Be omitted from managers' cost reports. D. Be considered fixed. E. Be charged to the next higher level. 3. The most effective basis for cost allocation exists when which one of the following can be determined? A. Cost shifting. B. Benefit received. C. Equity share. D. Cause and effect relationship. E. Ability to bear. 4. Alternative concepts of fairness in cost allocation, absent the cause-and-effect basis, include(s): A. Ability-to-bear. B. Benefit received. C. Critical cost. D. Both answer A and answer B are correct. E. Answers A, B and C are all correct. 5. Cost allocation is an important strategic issue for U.S. manufacturing firms with foreign subsidiaries because of: A. The tax implications. B. Quality concerns. C. Import restrictions. D. Both answer A and answer B are correct. E. Answers A, B and C are all correct. 6. Which of the following methods considers all reciprocal flows between service departments through simultaneous equations? A. Dual method. B. Step method. C. Reciprocal method. D. Direct method. E. None of the above. 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
7. Cost allocation provides a services firm a basis for evaluating the: A. Cost and profitability of its services. B. Cost of its services only. C. Profitability of its services only. D. Manufacturing costs for the company. E. None of the above. 8. Which one of the following methods uses units of output to allocate joint costs to joint products? A. Net realizable value method. B. Physical units method. C. Net sales value method. D. Sales value at split-off method. E. None of the above. 9. One limitation of the three departmental methods is that they: A. Can allocate to a department a lower cost than the cost of the service that the department could purchase from an outside supplier. B. Cannot allocate to a department a higher cost than the cost of the service that the department could purchase from an outside supplier. C. Can allocate to a department a lower cost than the cost of the service that the department could purchase from an inside supplier. D. Can allocate to a department a higher cost than the cost of the service that the department could purchase from an outside supplier. E. None of the above.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/03/2008 for the course ACCT 304 taught by Professor Any during the Spring '08 term at Rutgers.

Page1 / 38

ch12 - ch12 Student: _ 1. The objectives of cost allocation...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online