Quiz
Cost Final Chapter 15
Questions in this quiz (8)
1To discourage unnecessary use of a support department, management might ________.
- Aallocate user department costs based upon support department usage
- Ballocate support department costs based upon user department usage
- Callocate a fixed amount of support department costs to each and every department
- Dallocate a fixed amount of user department costs to each and every department
2The biggest advantage of using practical capacity to allocate costs is that it ________.
- Afocuses the user's division with the costs of overused capacity
- Bnever causes over or under-allocated overhead
- Cburdens the user divisions with the costs of unused capacity
- Dfocuses management's attention on unused capacity
3The method that allocates costs by explicitly including all the services rendered among all support departments is the ________.
- Adirect method
- Bstep-down method
- Creciprocal method
- Dsequential method
4A cost of operating a facility, department, activity area, or like cost object that is shared by two or more users is called a ________.
- Acombined cost
- Bdistinct cost
- Cfixed cost
- Dcommon cost
5Contract disputes regarding cost allocation can be reduced by defining ________.
- Athe material items allowed for production
- Bthe terms used, such as what constitutes direct
- Cpermissible tax deductions
- Dminimum profit level the company should earn
6Tours Corp offers towing services, auto routing, travel brochures, and other travel services for one annual fee. This is an example of ________.
- Arevenue tracing
- Brevenue allocation
- Ca bundled product
- Da business conglomerate
7The method that ranks individual products in a bundle for revenue allocation is the ________.
- Astand-alone revenue-allocation method
- Bincremental revenue-allocation method
- Cunit-cost weighting method
- Dphysical-unit weighting method
8Which of the following is a disadvantage of a dual-rate method?
- AIt allocates fixed costs on the basis of budgeted long-run usage may tempt some managers to underestimate their planned usage.
- BIt may lead operating department managers to make sub-optimal decisions that are in their own best interest.
- CIt allocates fixed and variable-cost pool using the same cost-allocation base, which will mislead managers in making decisions.
- DIt does not guide department managers to make decisions that benefit both the organization as a whole and each department.
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- Quiz on Cost Final Chapter 15, created by amanda.padilla on 22/05/2016.
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- amanda.padilla
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- English
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