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10 Cards in this Set
- Front
- Back
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The direct method of departmental cost allocation is the simplest of the three methods because it only considers the reciprocal flow partially (T/F) |
True |
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Joint products are usually made from the same raw materials (T/F) |
True |
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Transfer pricing is used for products traded in the competitive markets (T/F) |
False |
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Companies centralize common service to reduce cost and improve quality at the same time (T/F) |
True |
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The objectives of cost allocation are to |
Motivate effort, provide incentives, and fairly determine rewards |
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The most clear and unbiased basis for cost allocation exists when which one of the following can be determined? |
Cause-and-effect Relationship |
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Which of the following methods considers all reciprocal flows between service departments through simultaneous equations? |
Reciprocal Method |
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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: |
Reciprocal Flows |
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The reciprocal method of departmental cost allocation is preferred over the step method because it takes into account all the reciprocal flows between: |
The service departments |
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In making decisions about whether to sell or further process joint products, or by-products, allocation of common or joint costs is: |
Irrelevant and should be ignored |
