Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
1. The objectives of cost allocation are to:
2. A key ethical issue in cost allocation involves costing in an international context, because
the choice of a cost allocation method can affect:
3. The most clear and unbiased basis for cost allocation exists when which one of the
following can be determined?
4. An alternative concept of fairness in cost allocation, absent the cause-and-effect basis,
includes:
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?
7. Cost allocation provides a service 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. The reciprocal method can be solved using the Excel function:
10. Cost allocation of shared facilities cost is intended to remind managers of:
11. An overhead cost that can be traced directly to either a service or production
department:
12. Allocation of service department costs to producing departments is the most complex of
the allocation phase of departmental cost allocation because of the likely presence of:
13. The direct method of departmental cost allocation is the simplest of methods because it
ignores:
14. The reciprocal method of departmental cost allocation is preferred over the step method
because it takes into account all the reciprocal flows between:
15. The mathematical technique that underlies the reciprocal cost allocation method is:
16. Dual allocation is a cost allocation approach that separates direct and indirect costs,
tracing the direct costs directly to the cost object that:
17. If a budgeted activity base is used as the base in cost allocation, each department's cost
allocation will be predictable, and not influenced by the:
18. The concepts of cost allocation that are used in manufacturing can also apply in:
19. In making decisions about whether to sell or further process joint products or by-
products, allocation of common or joint costs is:
20. By-product costing that uses the asset recognition method(s) creates:
21. Revenue methods of by-product cost allocation are justified on financial accounting
concepts of:
22. A concept which is commonly employed with allocation bases related to size is:
23. Which one of the following methods of cost allocation is completed by taking the service
flows to production departments only and determining each production department's share of
that service?
24. Which one of the following methods of allocating joint costs uses a measure of weight,
size or number of units to allocate joint costs to joint products?
25. Which one of the following methods of allocating joint costs allocates joint costs to joint
products on the basis of estimated sales values at the split-off point?
26. The Merchant Manufacturing Company has two service departments — purchasing and
maintenance, and two production departments — fabrication and assembly. The distribution of
each service department's efforts to the other departments is shown below:
FROM TO
Purchasing Maintenance Fabrication Assembly
Purchasing 0% 60% 10% 30%
Maintenance 20% 0% 30% 50%
The direct operating costs of the departments (including both variable and fixed costs) were as
follows:
Purchasing $96,000
Maintenance 18,000
Fabrication 72,000
Assembly 48,000
The total cost accumulated in the fabrication department using the direct method is (calculate
all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar
amounts to the nearest whole dollar):
27. The Merchant Manufacturing Company has two service departments — purchasing and
maintenance, and two production departments — fabrication and assembly. The distribution of
each service department's efforts to the other departments is shown below:
FROM TO
Purchasing Maintenance Fabrication Assembly
Purchasing 0% 60% 10% 30%
Maintenance 20% 0% 30% 50%
The direct operating costs of the departments (including both variable and fixed costs) were as
follows:
Purchasing $96,000
Maintenance 18,000
Fabrication 72,000
Assembly 48,000
The total cost accumulated in the assembly department using the direct method is (calculate all
ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts
to the nearest whole dollar):
28. The Merchant Manufacturing Company has two service departments — purchasing and
maintenance, and two production departments — fabrication and assembly. The distribution of
each service department's efforts to the other departments is shown below:
FROM TO
Purchasing Maintenance Fabrication Assembly
Purchasing 0% 60% 10% 30%
Maintenance 20% 0% 30% 50%
The direct operating costs of the departments (including both variable and fixed costs) were as
follows:
Purchasing $96,000
Maintenance 18,000
Fabrication 72,000
Assembly 48,000
The total cost accumulated in the fabrication department using the step method is (assume the
purchasing department goes first; calculate all ratios and percentages to 4 decimal places, for
example 33.3333%, and round all dollar amounts to the nearest whole dollar):
29. The Merchant Manufacturing Company has two service departments — purchasing and
maintenance, and two production departments — fabrication and assembly. The distribution of
each service department's efforts to the other departments is shown below:
FROM TO
Purchasing Maintenance Fabrication Assembly
Purchasing 0% 60% 10% 30%
Maintenance 20% 0% 30% 50%
The direct operating costs of the departments (including both variable and fixed costs) were as
follows:
Purchasing $96,000
Maintenance 18,000
Fabrication 72,000
Assembly 48,000
The total cost accumulated in the assembly department using the step method is (calculate all
ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts
to the nearest whole dollar):
