Cost Accounting Final

Support departments costs are related to production

indirectly

A common cost occurs when

the same resource is used for two or more business units

Most companies begin with a centralized organizational model and gradually move towards a decentralized model. As some companies grow, they acquire other companies in an effort to streamline operations and become more efficient. One result of these acquisitions is integration. Which of the following is an example of vertical integration?

A factory that manufactures furniture purchases a furniture marketing and distribution firm.

As companies expand and become more decentralized, they will often seek ways in which they can save money. additionally, management will seek ways to increase efficiency, and that may include purchasing other companies. These acquisitions will involve an integration of the supply chain and will help the company better achieve long-term company goals. Which of the following is an example of an integration type other than backward vertical?

A farm that grows soybeans purchases a company that can convert the beans into soymilk that will be available for resale.

Most companies begin with a centralized organizational model and gradually move towards a decentralized model. As some companies grow, they acquire others in an effort to streamline operations and become more efficient. One result of these acquisitions is integration. Which of the following is an example of an integration type other than vertical integration?

A peanut butter producer buys a factory that manufactures jelly.

The best way to allocate support department costs is

Based on the support department and the most logical allocation base for that department

which method of allocating support department costs is easiest but least accurate?

Direct Method

When allocating common costs, which method ranks the users of the cost to determine who is most responsible?

Incremental Cost allocation method

A large home improvement retail company is moving towards a decentralized management system from a centralized system. They are aware that this will entail generating various responsibility centers and placing the appropriate people in charge. Which of the following would be considered a profit center for the company?

The garden center in the store

An example of support departments includes all of the following except:

Machining

The highest cost that relates to support departments costs is

Personnel

All of the following are types of work completed in a support department except:

Production work to produce the product

Support departments are also known as:

Service departments

when allocating common costs, which method allocates the cost based on the percentage paid?

Stand-alone cost allocation method

Which methods are acceptable ways to allocate common costs?

Stand-alone cost allocation method and cost allocation method

Which of the following terms describes departments within a company that provides the necessary services to produce a product but is not directly involved in the production of the production?

Support departments

Support department costs are

allocated by the user department to the units produced