COST ACCOUNTING
16th Edition
ISBN: 9781323694008
Author: Horngren
Publisher: PEARSON C
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Question
Chapter 15, Problem 15.7Q
To determine
Cost Allocation Method:
The cost allocation method is the method by which the costs to be assigned are identified and aggregated. The cost allocation method is of two types, single rate allocation method, and dual rate allocation method.
To explain: The difference between the three methods of allocating the costs of support departments to the operating departments.
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Students have asked these similar questions
Which method of allocating support department costs is most accurate of the three methods.
Compare and explain differences in the support-department costs allocated to each operating department.
Distinguish among the three methods of allocating the costs of support departments to operating departments.
Chapter 15 Solutions
COST ACCOUNTING
Ch. 15 - Prob. 15.1QCh. 15 - Describe how the dual-rate method is useful to...Ch. 15 - How do budgeted cost rates motivate the...Ch. 15 - Give examples of allocation bases used to allocate...Ch. 15 - Why might a manager prefer that budgeted rather...Ch. 15 - To ensure unbiased cost allocations, fixed costs...Ch. 15 - Prob. 15.7QCh. 15 - What is conceptually the most defensible method...Ch. 15 - Distinguish between two methods of allocating...Ch. 15 - What are the challenges of using the incremental...
Ch. 15 - Prob. 15.11QCh. 15 - What is one key way to reduce cost-allocation...Ch. 15 - Describe how companies are increasingly facing...Ch. 15 - Distinguish between the stand-alone and the...Ch. 15 - Identify and discuss arguments that individual...Ch. 15 - Single-rate versus dual-rate methods, support...Ch. 15 - Single-rate method, budgeted versus actual costs...Ch. 15 - Dual-rate method, budgeted versus actual costs and...Ch. 15 - Support-department cost allocation; direct and...Ch. 15 - Support-department cost allocation, reciprocal...Ch. 15 - Direct and step-down allocation. E-books, an...Ch. 15 - Reciprocal cost allocation (continuation of...Ch. 15 - Allocation of common costs. Evan and Brett are...Ch. 15 - Allocation of common costs. Gordon Grimes, a...Ch. 15 - Revenue allocation, bundled products. Couture Corp...Ch. 15 - Allocation of common costs. Jim Dandy Auto Sales...Ch. 15 - Single-rate, dual-rate, and practical capacity...Ch. 15 - Prob. 15.28PCh. 15 - Fixed-cost allocation. Central University...Ch. 15 - Allocating costs of support departments; step-down...Ch. 15 - Support-department cost allocations;...Ch. 15 - Common costs. Tate Inc. and Booth Inc. are two...Ch. 15 - Prob. 15.33PCh. 15 - Support-department cost allocations;...Ch. 15 - Revenue allocation, bundled products. Boca Resorts...Ch. 15 - Support-department cost allocations; direct,...
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Similar questions
- What are support departments, and why are their costs allocated to other departments? What process is used to allocate support department costs?arrow_forwarda) Allocate the service department costs to the two operating departments using the direct method.arrow_forwardCompare and explain differences in the support-department costs allocated to eachproduction department.arrow_forward
- Allocate the support departments’ costs to the operating departments using the direct methodarrow_forwardGive examples of allocation bases used to allocate support-department cost pools to operating departments.arrow_forwardThe order in which the costs of service departments are allocated will affect the amounts allocated to an operating department when the direct method is used. True or False True Falsearrow_forward
- How does management determine the order in which support department costs are allocated under the sequential method?arrow_forwardWhen using the sequential distribution method of distributing service department costs, if a service department receives services from other service departments, will those costs be allocated back to it even though it was the first service department distributed?arrow_forward1. Compare and explain differences in the support-department costs allocated to eachproduction department. 2. What approaches might be used to decide the sequence in which to allocate supportdepartments when using the step-down method?arrow_forward
- Discuss two different criteria Mr. Smith can use to determine the sequence for allocating support department costs using the step-down method.arrow_forwardExplain briefly the main differences between the direct, step-down, and reciprocal-services methods of service department cost allocation.arrow_forwardWhich of the following principles should be applied when the step method of allocating service department costs is used? The sequence of allocation among departments should be randomly selected. The sequence of allocation among departments should proceed from the largest department as measured by total assets to the smallest. The sequence of allocation among departments should proceed from the largest provider of interdepartmental services to the smallest. All possible sequences of service department allocations should be computed. The sequence that provides the largest allocation of service costs should then be selected.arrow_forward
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