Ch15 - CHAPTER 15 ALLOCATION OF SUPPORT DEPARTMENT COSTS,...

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CHAPTER 15ALLOCATION OF SUPPORT DEPARTMENTCOSTS,COMMON COSTS, AND REVENUESTRUE/FALSE1.The dual cost-allocation method classifies costs into two pools, a budgeted costpool and an actual cost pool.Difficulty:1Objective:1Terms to Learn:dual-rate cost-allocation method
The dual cost-allocation method classifies costs into two pools, a variable cost pooland a fixed cost pool.2.Using the single-rate method transforms the fixed costs per hour into a variable costto users of that facility.Difficulty:3Objective:1Terms to Learn:single-rate cost-allocation method
3.The single-rate cost-allocation method provides better information for decisionmaking than the dual-rate method.Difficulty:2Objective:1
Terms to Learn:single-rate cost-allocation method, dual-rate cost-allocationmethodThe dual-rate cost-allocation method provides better information for decisionmaking than the single-rate method.4.An advantage of the single-rate method is that it is easier and always the mostaccurate cost-allocation choice.Difficulty:2Objective:1
Terms to Learn:single-rate methodThe single-rate method is the easiest cost allocation method, but it is the leastaccurate cost-allocation choice.15-1
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Managerial Accounting
Warren/Tayler
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5.When budgeted cost-allocation rates are used, user-division managers faceuncertainty about the allocation rates for that budget period.Difficulty:2Objective:2Terms to Learn:single-rate cost-allocation method, dual-rate cost-allocation
methodWhen budgeted cost-allocation rates are used, user-division managers facenouncertaintyabout the allocation rates for that budget period.6.When budgeted cost-allocation rates are used, managers of the supplier division aremotivated to improve efficiency.Difficulty:2Objective:2Terms to Learn:single-rate cost-allocation method, dual-rate cost-allocation
method7.When budgeted cost-allocation rates are used, variations in actual usage by onedivision affect the costs allocated to other divisions.Difficulty:2Objective:2
Terms to Learn:single-rate cost-allocation method, dual-rate cost-allocationmethodWhenactualcost-allocations rates are used, variations in actual usage by onedivision affect the costs allocated to other divisions.8.The only choices that a firm has for support department cost allocation rates are touse either a budgeted rate or an actual rate.Difficulty:2Objective:2
Terms to Learn:single-rate method, dual-rate methodThe choices a firm has for support department cost allocation rates include using abudgeted rate, an actual rate, or some negotiated rate.9.The direct allocation method highlights recognition of services rendered by supportdepartments to other support departments.

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Managerial Accounting
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Chapter 5 / Exercise 5
Managerial Accounting
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