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ch12 - ch12 Student 1 The objectives of cost allocation are...

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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: 3. The most effective basis for cost allocation exists when which one of the following can be determined? 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: 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
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7. Cost allocation provides a services firm a basis for evaluating the: 8. Which one of the following methods uses units of output to allocate joint costs to joint products? 9. One limitation of the three departmental methods is that they:
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