Cost Management Chapter 7 Exam Questions with Verified Answers Latest Update (Graded A+)
The objectives of cost allocation are to: - Answers Motivate, provide incentives, and determine fair rewards.
A key ethical issue in cost allocation involves costing in an international context, because the c...
The objectives of cost allocation are to: - Answers Motivate, provide incentives, and determine fair
rewards.
A key ethical issue in cost allocation involves costing in an international context, because the choice of a
cost allocation method can affect: - Answers Taxes in domestic and foreign countries.
The most effective basis for cost allocation exists when which one of the following can be determined? -
Answers cause and effect relationship
An alternative concept of fairness in cost allocation, absent the cause-and-effect basis, includes: -
Answers ability to bear
Cost allocation is an important strategic issue for U.S. manufacturing firms is with foreign subsidiaries
because of: - Answers the tax implications
Which of the following methods considers all reciprocal flows between service departments through
simultaneous equations? - Answers reciprocal method
Cost allocation provides a service firm a basis for evaluating the: - Answers cost and profitability of
services
Which one of the following methods uses units of output to allocate joint costs to joint products? -
Answers physical units method
The reciprocal method can be solved using the Excel function: - Answers solver
Cost allocation of shared facilities cost is intended to remind managers of: - Answers both the cost and
value of using shared resources
An overhead cost that can be traced directly to either a service or production department: - Answers is
charged directly to that department
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: - Answers reciprocal flows
The direct method of departmental cost allocation ignores: - Answers reciprocal flows
The reciprocal method of departmental cost allocation is preferred over the step method because it
takes into account all the reciprocal flows between: - Answers the service departments
The mathematical technique that underlies the reciprocal cost allocation method is: - Answers
simultaneous equations
Dual allocation is a cost allocation approach that separates direct and indirect costs, tracing the direct
costs directly to the cost object that: - Answers caused the cost
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