Department Costs, Common Costs and Revenues

1.Which of the following approaches are used to assign costs among reciprocal support departments?

Direct allocation techniqueStep-down allocation approachReciprocal allocation methodAll of the above

2.In the incremental cost allocation approach, what is the term for the cost object user that holds the second position in the ranking sequence?

3.What is the name of the technique that distributes the expenses of support departments to both operating and other support departments?

Indirect allocation methodDirect allocation approachStep-down allocation techniqueReciprocal allocation method

4.Which cost allocation technique assigns support department expenses to operating departments by accounting for all mutual services exchanged among support departments?

5.In the incremental approach, the party assigned the highest priority in distributing shared costs is known as the ____________?

6.If Division A's employees work 8,000 hours at a rate of $90 per hour, what hourly rate should Division B be charged under the single rate method?

$90 per hourA rate lower than $90 per hourA rate higher than $90 per hourNone of the above

7.Which cost allocation approach used for support departments does not distinguish between fixed and variable costs?

allocation based on sales compositiondual-rate method for cost distributionsingle-rate cost allocation techniqueallocation method based on quantity variance

8.What is the designated term for an item that requires a specific calculation of revenue?

9.Which approach assigns bundled revenue to individual products based on their specific characteristics used as weighting factors?

sequential allocation techniquestand-alone revenue allocation approachadditional revenue allocation methodrevenue composition allocation strategy

10.In the incremental revenue allocation approach, what is the designation for the product ranked third?

11.In the incremental cost allocation approach, what is the term for the cost object user ranked first?

12.In the incremental cost allocation approach, how is the cost object ranked third in the sequence categorized?

13.In the incremental revenue allocation approach, what term is used to describe the product ranked first?

14.Which approach separates support department expenses into fixed and variable cost categories?

allocation based on sales compositiondual-rate cost allocation techniquesingle-rate cost distribution approachallocation method based on quantity variance

15.Which types of weights can be used in the stand-alone revenue allocation approach?

Weights based on selling pricesWeights derived from unit costsWeights measured by physical quantitiesAll of the above

16.What term describes the expenses that include both interdepartmental cost allocations and the costs of support departments?

fully reciprocal costsnotional costsfunctional expensesvariable operational costs

17.What term describes the expense of running an activity, facility, or cost object that is typically shared by two or more users?

combined expensecommon costindividual costadditional cost

18.Which of the following are examples of revenue objects?

increase in revenuemutual revenuedistribution of revenuerevenue objects

19.Which approach arranges cost objects based on the responsibility of individual users, ranking them from the most to the least accountable?

method for allocating costs of combined productsapproach based on assigning variable expensesprocedure for distributing costs independentlymethod that allocates costs incrementally

20.Which approach assigns cost allocation weights by treating the cost of each user independently?

allocation method for combined productsmethod based on variable costsstand-alone cost allocation techniqueincremental cost allocation approach