Which of the following methods recognizes some but not all of the service that occur between service department?
Throughout this text, we have emphasized cost allocations only in the operating departments of a company. These operating departments perform the primary purpose of the company—to produce goods and services for consumers. Examples of operating departments are the assembly departments of manufacturing firms and the departments in hotels that take and confirm reservations. Show
The costs of service departments are allocated to the operating departments because they exist to support the operating departments. Examples of service departments are maintenance, administration, cafeterias, laundries, and receiving. Service departments aid multiple production departments at the same time, and accountants must allocate and account for all of these costs. It is crucial that these service department costs be allocated to the operating departments so that the costs of conducting business in the operating departments are clearly and accurately reflected. Accountants allocate service department costs using some type of base. When the companies’ managers choose bases to use, they consider such criteria as the types of services provided, the benefits received, and the fairness of the allocation method. Examples of bases used to allocate service department costs are number of employees, machine-hours, direct labor-hours, square footage, and electricity usage. There are three methods for allocating service department costs:
Next, we will look at each method. Which of the following methods recognizes some (but not all) of the services that occur between service departments?
Q: The only method of allocation of service department costs to producing departments that considers… A: There are only three methods for allocating service department costs to production/producing… Q: Which of the following is the most difficult but most accurate of the commonly used methods for… A: The cost of support departments is allocated to the production departments. Some a support… 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: Why does dual cost allocation improve the resulting allocation of service department costs? A: Dual Cost Allocation segregates total costs into two parts Fixed Costs. Variable Costs. Each… Q: In general, what oconditions would lead to greater differences in the amounts allocated to operating… A: Service departments or cost centers are those departments which provide services to other… 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: Which of the following is referred to as the second stage of cost allocation? O The allocation of… A: Cost allocation is the assigning and allocating the cost to the specific objects, departments,… Q: the following methods of cost allocation is completed by taking the service flows to epartments only… A: Direct method Q: The order in which the costs of service departments are allocated will affect the amounts allocated… A: There are two type of departments in the business. One is operating departments and other is Service… Q: Compare the total support department costs allocated to each production department under each cost… A: Calculation of the total support department costs to the Cutting department under the direct method… Q: Which one of the following statements is incorrect? A. The reciprocal method is rarely used in… A: The following statement is Incorrect:: In the step method, any amount of the allocation base that is… Q: If two support departments service the same number of departments, which support department's costs… A: Departmental overhead rate is calculated by adding the allocated service costs to the overhead costs… Q: There are two types of costs originating from the modern agency problem: direct costs and indirect… A: Costs The expenditure incurred on that is imputable to ascertain the value of a given item is… Q: What are support departments, and why are their costs allocated to other departments? What process… A: generally supporting departments are the departments that provide services to main departments. so… Q: What are support departments, and why are their costs allocated to other departments? What process… A: Support departments are those departments which helps or provides support to other operation… Q: Give examples of allocation bases used to allocate support-department cost pools to operating… A: Click to see the answer 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: Which of the following is not a reason for cost allocation? A. Maximization of direct cost… A: Cost allocation is a process of allocating the cost of different nature or similar nature into :… 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: The support department allocation method that is the most widely used because of its simplicity is… A: Direct method of overhead allocation means a method where overhead of support department is direct… Q: Which method of allocating support department costs is most accurate of the three methods. A: Click to see the answer Q: How to allocate indirect costs to multiple departments using an ABC cost driver? A: Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing… Q: Assigning indirect costs to departments is completed by? A: Indirect costs are the costs that are not directly traceable to the product like indirect labor… 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: The Reciprocal Method The reciprocal method answers the complaints leveled against the direct and… A: The given equations are as follows:- RCM=9000000+(1500/54000)RCM+(110/560)RCA… Q: Required : a. What is the complete reciprocated cost of the Plant Maintenance Department? b. What… A: Given information is: ompany B is interested in using the reciprocal allocation method. The… Q: Explain the difference between the engineered-cost and discretionary-cost approaches to… A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to… Q: When allocating support department costs, managers must identify cost pools. The choice of cost… A: Cost pools represents the various cost incurred in the production process of the company that have… Q: Distinguish between direct and indirect expenses and identify bases for allocating indirect expenses… A: Click to see the answer Q: S1 - After service department costs are allocated to other departments, costs are re-circulated back… A: Solution: S1- After service department costs are allocated to other departments, costs are… Q: Assigning indirect costs to departments is completed by ________. A: Indirect costs are those costs that are not directly related with the production or selling. These… 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: 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 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: Do you think it is possible to set standard for delivery of service, which are primarily dictated by… A: Standards are set for efficient utilization of operation resources and to perform the activity with… Q: Which of the following statements best describes a profit center?a. The responsibility for combining… A: The profit center affects the major profit decisions of the authority that includes the choosing… Q: Explain whether the cost accounting system primarily supports internal or external reporting. A: Cost Accounting System: Cost accounting system refers to as a framework designed by the company to… Q: Which of the following is not among the main uses of Activity-Based-Management ABM Select one: O a.… A: Activity Based Management is a method or procedure of analysing profitability of the company by… Q: Calculate the costs transferred out of each department. A: Given: Mixing Dept. Amount Cooking Dept. Amount Packaging Dept. Amount Direct materials… Q: What is the total amount of service cost that should be allocated to the Printing department under… A: Joint cost can be referred to as the cost which is incurred for supporting more then one product or… Q: responsibility centers have accountability for revenues A: First option is wrong because although investment center has accountability for revenues, cost… Knowledge Booster Learn more about Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below. SEE MORE QUESTIONS Recommended textbooks for you Managerial Accounting: The Cornerstone of Busines... ISBN:9781337115773 Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger Publisher:Cengage Learning Principles of Cost Accounting ISBN:9781305087408 Author:Edward J. Vanderbeck, Maria R. Mitchell Publisher:Cengage Learning Managerial Accounting ISBN:9781337912020 Author:Carl Warren, Ph.d. Cma William B. Tayler Publisher:South-Western College Pub Financial And Managerial Accounting ISBN:9781337902663 Author:WARREN, Carl S. Publisher:Cengage Learning, Cornerstones of Cost Management (Cornerstones Ser... ISBN:9781305970663 Author:Don R. Hansen, Maryanne M. Mowen Publisher:Cengage Learning Managerial Accounting: The Cornerstone of Busines... ISBN:9781337115773 Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger Publisher:Cengage Learning Principles of Cost Accounting ISBN:9781305087408 Author:Edward J. Vanderbeck, Maria R. Mitchell Publisher:Cengage Learning Managerial Accounting ISBN:9781337912020 Author:Carl Warren, Ph.d. Cma William B. Tayler Publisher:South-Western College Pub Financial And Managerial Accounting ISBN:9781337902663 Author:WARREN, Carl S. Publisher:Cengage Learning, Cornerstones of Cost Management (Cornerstones Ser... ISBN:9781305970663 Author:Don R. Hansen, Maryanne M. Mowen Publisher:Cengage Learning Which of the following methods ignores the fact that some service departments provide service to other service departments?Which of the following methods ignores the fact that some service departments provide service to other service departments? Direct Method (The direct method ignores service departments providing service to other service departments.)
Which of the following methods is the most accurate among the three methods for allocating service department costs?The reciprocal method is the most accurate of the three methods for allocating service department costs, because it recognizes reciprocal services among service departments. It is also the most complicated method, because it requires solving a set of simultaneous linear equations.
In which of the following overhead allocation methods may no other service department?The direct method allocates costs to the operating departments directly, with no allocations to the other service departments.
When the step down method is used the service department whose costs 1 point are allocated first is often the department that?Question 5. When the step-down method is used, the service department whose costs are allocated first is often the department that: obtains the highest yield.
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