Which service department cost allocation method provides for reciprocal allocation of service costs among the service department as well as to the revenue producing departments?   a. Method of Algebra b. Step method c. Indirect method d. direct method e. None of the above

Q: What are the three methods of departmental cost allocation? Explain how they differ, which is…

A: Departmental cost allocation Departmental cost allocation refers to the allocation of overhead…

Q: Regardless of the system used In departmental cost analysis: Multiple Cholce Total departmental…

A: Direct cost like materials and labor are not allocated but indirect cost like overhead cost is…

Q: What is conceptually the most defensible method for allocating support-department costs? Why?

A: Cost Allocation Method: The cost allocation method is the method by which the costs to be assigned…

Q: Under the reciprocal method, what would be the total Engineering department cost?

A: Calculation of total Engineering department cost : Given, Allocation of Maintenance cost to other…

Q: The difference between a department’s net sales and cost of goods sold is called (a) departmental…

A: The income statement is the financial statement of the business which shows the net profits or…

Q: Required: 1. Distribute the departmental costs to the college's three divisions based on the…

A: Calculation of Allocation base     Budgeted Enrolment Budget Credit Hours Planned Course…

Q: A company has several service departments that provide differing amounts of service to each other…

A: Under the direct method of cost allocation, cost of support departments is allocated directly to the…

Q: Indirect costs occur when? A. Resources are shared by more than one product or service. B. Costs…

A: All those expenses that are incurred in common for different projects, products, or business…

Q: Is it true that with the use of the algebraic method, each department’s costs are set out in an…

A: Direct costs are costs that can be credited to a specific department. The company knows what…

Q: Need detail explanation. Explain departmental income statement and the criterion for division of…

A: A department is a unit or division of the company. A company may structure its business in different…

Q: Which method of allocating support department cost is more accurate method

A: Accurate method of allocating support department cost is "Reciprocal method" because under this…

Q: Suggest a reasonable basis for allocating thefollowing indirect expenses to departments: advertising

A: An indirect cost is the cost which is indirectly involved in the process of production.

Q: Discuss two different criteria Mr. Smith can use to determine the sequence for allocating support…

A: Cost allocation is a process of assigning or allocating indirect cost to each and every unit using a…

Q: “Department indirect-cost rates are never activity-cost rates.” Do you agree? Explain.

A: Department Indirect Cost Rate:  Department indirect cost rate is the rate to find out the proportion…

Q: Which is not a common method used to allocate costs under the departmental approach?   Multiple…

A: The common method used to allocate costs under the departmental approach are as follow: Step…

Q: What are the limitations of joint product and departmental cost allocation?

A: The limitations of joint product and departmental cost allocation.

Q: The following are approaches in allocating joint costs incurred up to split off point, except:   a.…

A: Solution: The following are approaches in allocating joint costs incurred up to split off point,…

Q: Give examples of allocation bases used to allocate support-department cost pools to operating…

A:

Q: Prepare a complete service cost allocation report with details using the following method:…

A: total overhead of admin dept= p150000 + 20% overhead of IT dept…

Q: Distinguish between departmental gross profit, departmental operating income and departmental direct…

A: Departmental Accounting: This accounting is used for maintaining the accounts of various branches or…

Q: The reciprocal allocation method a.is the most widely used because of its simplicity b.requires the…

A: The reciprocal technique allocates expenditures incurred y service departments to other departments…

Q: The difference between a department is gross profit and it's expenses is ____ .

A: Gross profit of the department means sales revenues less cost of goods sold.

Q: n responsibility accounting the most relevant classification of costs is   discretionary and…

A: Solution: In responsibility accounting, responsibility are fixed at individual and department level.…

Q: How is a departmental contribution to overhead an effective tool in assessing each department's…

A: The Departmental Contribution is the difference between Department Revenue and the direct Expesnes.…

Q: be applied when the step method of allocating service department costs is used?     The sequence…

A: step method allocation of department costs, allocate some of the service department costs to other…

Q: Which of the following methods recognizes some (but not all) of the services that occur between…

A: Services- It is an intangible thing which can not be seen by any person but anyone can feel it like…

Q: ion for division of indirect costs among departments. Provide a hypothetical example in which at…

A: Departmental income statements are prepared to assess the relative profitability of each department.…

Q: s it true that the direct method is a method of cost allocation that charges costs of service…

A: Direct Method- Direct method refers to the method under which the cost of the service department is…

Q: the following methods of cost allocation is completed by taking the service flows to epartments only…

A: Direct method

Q: relevant (differential) revenues and relevant (differential) costs

A: Relevant revenues and relevant costs are two terms used in evaluating the acceptance of special…

Q: Which of the following is TRUE regarding the total service department cost allocated by the three…

A: The overheads of the servie department has to be allocated to the production department so that the…

Q: Which of the following statements is not an Objective of the cost management system Select one: a.…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: Explain departmental income statement and the criterion for division of indirect costs among…

A: Departmental income statements are prepared to assess the relative profitability of each department.…

Q: The three major categories of agency costs are

A: Agency cost is considered as an internal cost, that arises from the actions of an agent who works on…

Q: Dual allocation is a cost allocation approach that separates direct and indirect costs, tracing the…

A: Dual allocation method: It involves two type of cost pools, fixed cost and variable cost.

Q: Using the reciprocal services method of support department cost allocation, determine: a. The…

A: Requirement a:   Compute the percentage of janitorial cost.

Q: Differentiate between centralized and decentralized operations.   Also, differentiate between a…

A: Departmentalization: Departmentalization is a cycle wherein occupations or groups are joined…

Q: Under activity -based costing , second stage allocation would involve a. Calculating activity rates…

A: Activity based costing system is a costing system which assigns costs on the basis of activities and…

Q: REQUIRED: a. Joint cost allocated to by-product X amounted to? b. Joint

A: the fixed cost does not change along with the production. They have to incur irrespective of the…

Q: What is a potential disadvantage of the reciprocal method? a. It is the most complex method of cost…

A: Reciprocal method: It is the method in which the allocation of costs spent on other departments by…

Q: Which of the following descriptions could be applied to the IT costs in question four? ( previous…

A: Please see Step 2 for required information.

Q: Activity center is a unit in an organization for which management wants the costs of a set of…

A: Meaning of Activity Center: A segment of the production or service process for which management…

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.