OBJU4_APP_A_05

OBJU4_APP_A_05 - 6 Understand the pitfalls of using $ sales as an allocation base 7 Describe the retainer fee approach to allocation and explain

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
COST AND MANAGEMENT ACCOUNTING 2 UNIT 4 - APPENDIX A pp. 739-753: Service Department Costing and Other Allocations LEARNING OUTCOMES : 1. Distinguish between and operating department and a service department . 2. State the purpose of allocations of service department costs. 3. Allocate Service Department costs using the Direct Metho d, the Step Method , and the Reciprocal Method . State the strengths and weaknesses of each method. 4. Allocate variable and fixed service department costs separately at the beginning of a period and the end of a period using the most appropriate allocation methods. 5. Understand the pitfalls of allocating fixed costs on the basis of actual usage.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 6. Understand the pitfalls of using $ sales as an allocation base. 7. Describe the retainer fee approach to allocation and explain whether all costs should be allocated. 8. Describe the two methods of allocating common costs (the incremental method and the stand alone method ) and calculate the amount of the allocation for a given example under each method. (Supplemented from Horngren) Demonstration and Assignment Material: EA-1, EA-2, EA-3, EA-4, EA-5. EA-6, EA-7, , PA-8, PA-10, PA-12, PA-13, PA-14, Case A-15. RF 06/04...
View Full Document

This note was uploaded on 03/03/2012 for the course ACCT 2460 taught by Professor Farrar during the Winter '12 term at Conestoga.

Ask a homework question - tutors are online