Allocation of Support Department Cost (SU 5)
The cost-allocation method that allocates support department costs only to production departments is the: A) direct method B) sequential method C) step-down method D) reciprocal method
Answer: A
Name three methods which may be used to allocate support costs within an organisation containing multiple support departments.
1. The direct method. 2. The step-down method. 3. The reciprocal method.
What are two methods that a manager can use to allocate common costs to two or more users? Describe each method.
1. The stand-alone method: The stand-alone method uses information pertaining to each user of the cost object to determine the cost allocation weights. 2. The incremental method: The incremental method ranks individual users of the cost object and allocates common costs first to the primary user, and then to the other incremental users.
Benefits of the single-rate method include: A) it is easier to calculate B) fixed costs that are transformed into variable costs for user decision making C) signals regarding how variable and fixed costs behave differently D) information that leads to outsourcing decisions that benefit the organisation as a whole
Answer: A
Benefits of the single-rate method include: A) it is easier to calculate B) fixed costs that are transformed into variable costs for user decision making C) signals regarding how variable and fixed costs behave differently D) information that leads to outsourcing decisions that benefit the organiSation as a whole
Answer: A
The cost-allocation method that allocates support department costs only to production departments is the: A) direct method B) sequential method C) step-down method D) reciprocal method
Answer: A
Which of the following is NOT one of the three methods of allocating support department costs to operating departments? A) direct method B) incremental method C) step-down method D) reciprocal method
Answer: B
The method LEAST likely to cause disputes among product managers is: A) stand-alone revenue-allocation method B) incremental revenue-allocation method C) the direct revenue-allocation method D) All of these answers are correct
Answer: A
The method LEAST likely to cause disputes among product managers is: A) stand-alone revenue-allocation method B) incremental revenue-allocation method C) the direct revenue-allocation method D) All of these answers are correct
Answer: A
The step-down allocation method: A) typically begins with the support department that provides the highest percentage of its total services to other support departments B) recognizes the total amount of services that support departments provide to each other C) allocates complete reciprocated costs D) offers key input for outsourcing decisions
Answer: A
The step-down allocation method: A) typically begins with the support department that provides the highest percentage of its total services to other support departments B) recognizes the total amount of services that support departments provide to each other C) allocates complete reciprocated costs D) offers key input for outsourcing decisions
Answer: A
________ is a cost that the contract parties agree to include in the costs to be reimbursed. A) An allowable cost B) An unallowable cost C) An incremental cost D) A stand-alone cost
Answer: A
What is a "common cost"?
Answer: A common cost is the costs of a cost object that is shared by two or more users.
Complete reciprocated costs: A) are less than the support department's own costs B) include the support department's costs plus any interdepartmental cost allocations C) are used for step-down allocations D) are also referred to as budgeted costs
Answer: B
Complete reciprocated costs: A) are less than the support department's own costs B) include the support department's costs plus any interdepartmental cost allocations C) are used for step-down allocations D) are also referred to as budgeted costs
Answer: B
The advantage of using practical capacity to allocate costs: A) is that it allows a downward demand spiral to develop B) is that it focuses management's attention on managing unused capacity C) is that budgets are much easier to develop D) Either A or B are correct
Answer: B
The advantage of using practical capacity to allocate costs: A) is that it allows a downward demand spiral to develop B) is that it focuses management's attention on managing unused capacity C) is that budgets are much easier to develop D) Either A or B are correct
Answer: B
The dual-rate cost-allocation method classifies costs in each cost pool into a: A) budgeted-cost pool and an actual-cost pool B) variable-cost pool and a fixed-cost pool C) used-capacity-cost pool and a practical-capacity-cost pool D) direct-cost pool and a reciprocal-cost pool
Answer: B
The dual-rate cost-allocation method classifies costs in each cost pool into a: A) budgeted-cost pool and an actual-cost pool B) variable-cost pool and a fixed-cost pool C) used-capacity-cost pool and a practical-capacity-cost pool D) direct-cost pool and a reciprocal-cost pool
Answer: B
The method that ranks individual products in a bundle for revenue allocation is the: A) stand-alone revenue-allocation method B) incremental revenue-allocation method C) unit-cost weighting method D) physical-unit weighting method
Answer: B
The method that ranks individual products in a bundle for revenue allocation is the: A) stand-alone revenue-allocation method B) incremental revenue-allocation method C) unit-cost weighting method D) physical-unit weighting method
Answer: B
To discourage unnecessary use of a support department, management might: A) not allocate any support department costs to user departments B) allocate support department costs based upon user department usage C) allocate a fixed amount of support department costs to each department regardless of use D) issue memos on useful services provided by the support department
Answer: B
To discourage unnecessary use of a support department, management might: A) not allocate any support department costs to user departments B) allocate support department costs based upon user department usage C) allocate a fixed amount of support department costs to each department regardless of use D) issue memos on useful services provided by the support department
Answer: B
When budgeted cost-allocations rates are used: A) variations in actual usage by one division affect the costs allocated to other divisions B) the manager of the supplier division bears the risk of unfavorable cost variances C) user divisions pay for costs that exceed budgeted amounts D) user divisions pay for inefficiencies of the supplier department
Answer: B
When budgeted cost-allocations rates are used: A) variations in actual usage by one division affect the costs allocated to other divisions B) the manager of the supplier division bears the risk of unfavorable cost variances C) user divisions pay for costs that exceed budgeted amounts D) user divisions pay for inefficiencies of the supplier department
Answer: B
Which of the following departments is NOT a support department for a boat manufacturing company? A) Personnel B) Molding and assembly C) Data processing D) Accounting
Answer: B
Which of the following departments is NOT a support department for a boat manufacturing company? A) Personnel B) Molding and assembly C) Data processing D) Accounting
Answer: B
Which of the following departments is NOT an operating (or value added) department? A) Machining B) Accounting C) Assembly D) Finishing
Answer: B
Which of the following departments is NOT an operating (or value added) department? A) Machining B) Accounting C) Assembly D) Finishing
Answer: B
Which of the following is NOT one of the three methods of allocating support department costs to operating departments? A) direct method B) incremental method C) step-down method D) reciprocal method
Answer: B
________ occurs where revenues, related but NOT traceable to individual products, are assigned to those individual products. A) Revenue tracing B) Revenue allocation C) Stand-alone pricing D) Reciprocal pricing
Answer: B
________ occurs where revenues, related but NOT traceable to individual products, are assigned to those individual products. A) Revenue tracing B) Revenue allocation C) Stand-alone pricing D) Reciprocal pricing
Answer: B
AAA offers towing services, auto routing, travel brochures, and other travel services for one annual fee. This is an example of: A) revenue tracing B) revenue allocation C) a bundled product D) a joint product
Answer: C
AAA offers towing services, auto routing, travel brochures, and other travel services for one annual fee. This is an example of: A) revenue tracing B) revenue allocation C) a bundled product D) a joint product
Answer: C
Cost-based prices: A) are one way of setting prices in a competitive market B) provide an inherit incentive for the producer to control costs C) pass the majority of risk to the buyer D) are required in all government contracts
Answer: C
Cost-based prices: A) are one way of setting prices in a competitive market B) provide an inherit incentive for the producer to control costs C) pass the majority of risk to the buyer D) are required in all government contracts
Answer: C
Special cost-allocation problems arise when: A) support department costs exceed budgetary estimates B) practical capacity is used as the allocation base C) support departments provide reciprocal services to other support departments D) there is more than one operating department
Answer: C
Special cost-allocation problems arise when: A) support department costs exceed budgetary estimates B) practical capacity is used as the allocation base C) support departments provide reciprocal services to other support departments D) there is more than one operating department
Answer: C
The costs of unused capacity are highlighted when: A) actual usage based allocations are used B) budgeted usage allocations are used C) practical capacity-based allocations are used D) the dual-rate cost-allocation method allocates fixed costs based on actual usage
Answer: C
The costs of unused capacity are highlighted when: A) actual usage based allocations are used B) budgeted usage allocations are used C) practical capacity-based allocations are used D) the dual-rate cost-allocation method allocates fixed costs based on actual usage
Answer: C
The method that allocates costs by explicitly including all the services rendered among all support departments is the: A) direct method B) step-down method C) reciprocal method D) sequential method
Answer: C
The method that allocates costs by explicitly including all the services rendered among all support departments is the: A) direct method B) step-down method C) reciprocal method D) sequential method
Answer: C
The method that allocates costs in each cost pool using the same rate per unit is known as the: A) incremental cost-allocation method B) reciprocal cost-allocation method C) single-rate cost allocation method D) dual-rate cost-allocation method
Answer: C
The method that allocates costs in each cost pool using the same rate per unit is known as the: A) incremental cost-allocation method B) reciprocal cost-allocation method C) single-rate cost allocation method D) dual-rate cost-allocation method
Answer: C
The practical capacity method of allocating costs is: A) based on the budgeted capacity demanded. B) based on actual capacity used. C) based on the practical capacity supplied. D) based on the using departments negotiating the charges they will accept.
Answer: C
The practical capacity method of allocating costs is: A) based on the budgeted capacity demanded. B) based on actual capacity used. C) based on the practical capacity supplied. D) based on the using departments negotiating the charges they will accept
Answer: C
The reciprocal allocation method: A) is the most widely used because of its simplicity B) requires the ranking of support departments in the order that the allocation is to proceed C) is conceptually the most precise D) results in allocating more support costs to operating departments than actually incurred
Answer: C
The reciprocal allocation method: A) is the most widely used because of its simplicity B) requires the ranking of support departments in the order that the allocation is to proceed C) is conceptually the most precise D) results in allocating more support costs to operating departments than actually incurred
Answer: C
The support department allocation method that is the most widely used because of its simplicity is the: A) step-down method B) reciprocal allocation method C) direct allocation method D) sequential allocation method
Answer: C
The support department allocation method that is the most widely used because of its simplicity is the: A) step-down method B) reciprocal allocation method C) direct allocation method D) sequential allocation method
Answer: C
Under the stand-alone method of allocating common costs: A) a ranking is used to allocate costs among the users B) disputes can arise over who is the primary user C) each party bears a proportionate share of the total costs in relation to their individual stand-alone costs D) an incentive is created to be the first-ranked user
Answer: C
Under the stand-alone method of allocating common costs: A) a ranking is used to allocate costs among the users B) disputes can arise over who is the primary user C) each party bears a proportionate share of the total costs in relation to their individual stand-alone costs D) an incentive is created to be the first-ranked user
Answer: C
When actual cost-allocations rates are used: A) user divisions pay for costs that exceed budgeted amounts B) managers of the supplier division are motivated to improve efficiency C) user divisions do not know allocated amounts until the end of the accounting period D) managers of the user divisions may be tempted to underestimate planned usage
Answer: C
The revenue allocation may be weighted using physical units when: A) the individual products within the bundle have approximately the same value B) selling prices are unstable and unit costs are difficult to calculate C) other methods cannot be used for various reasons D) All of these answers are correct
Answer: D
When actual cost-allocations rates are used: A) user divisions pay for costs that exceed budgeted amounts B) managers of the supplier division are motivated to improve efficiency C) user divisions do not know allocated amounts until the end of the accounting period D) managers of the user divisions may be tempted to underestimate planned usage
Answer: C
________ is a package of two or more products (or services) that is sold for a single price but whose individual components may be sold as separate items at their own "stand-alone" prices. A) An assembly B) A subassembly C) A bundled product D) A good deal
Answer: C
________ is a package of two or more products (or services) that is sold for a single price but whose individual components may be sold as separate items at their own "stand-alone" prices. A) An assembly B) A subassembly C) A bundled product D) A good deal
Answer: C
A cost of operating a facility, department, activity area, or like cost object that is shared by two or more users is called a: A) direct cost B) joint cost C) fixed cost D) common cost
Answer: D
A cost of operating a facility, department, activity area, or like cost object that is shared by two or more users is called a: A) direct cost B) joint cost C) fixed cost D) common cost
Answer: D
An example of a revenue object is a: A) customer B) specific product C) division of a company D) All of these answers are correct
Answer: D
An example of a revenue object is a: A) customer B) specific product C) division of a company D) All of these answers are correct
Answer: D
Approaches used to rank products for revenue allocation might include: A) surveying customers on the importance of each product B) using recent data on stand-alone sales performance C) having managers use their knowledge and intuition D) All of these answers are correct
Answer: D
Approaches used to rank products for revenue allocation might include: A) surveying customers on the importance of each product B) using recent data on stand-alone sales performance C) having managers use their knowledge and intuition D) All of these answers are correct
Answer: D
Benefits of the dual-rate method include: A) variable costs that are transformed into fixed costs for user decision making B) the low cost of implementation C) avoidance of expensive analysis for categorizing costs as either fixed or variable D) information that leads to outsourcing decisions that benefit the organisation as a whole
Answer: D
Benefits of the dual-rate method include: A) variable costs that are transformed into fixed costs for user decision making B) the low cost of implementation C) avoidance of expensive analysis for categorizing costs as either fixed or variable D) information that leads to outsourcing decisions that benefit the organisation as a whole
Answer: D
Businesses offer bundled products to: A) increase customer exposure B) increase overall company profitability C) avoid the problems of revenue allocation D) Both A and B are correct.
Answer: D
Businesses offer bundled products to: A) increase customer exposure B) increase overall company profitability C) avoid the problems of revenue allocation D) Both A and B are correct
Answer: D
Contract disputes regarding cost allocation can be reduced by defining: A) the cost items allowed B) the terms used, such as what constitutes direct labor C) permissible cost-allocation bases D) All of these answers are correct
Answer: D
Contract disputes regarding cost allocation can be reduced by defining: A) the cost items allowed B) the terms used, such as what constitutes direct labor C) permissible cost-allocation bases D) All of these answers are correct
Answer: D
In certain high-cost defense contracts involving new weapons and equipment, contracts are rarely subject to competitive bidding because: A) the government is concerned that one firm might monopolize defense contracts B) there is an implicit agreement among defense contractors to "share contracts" C) all defense contractors have essentially the same cost structure D) None of these answers is correct
Answer: D
In certain high-cost defense contracts involving new weapons and equipment, contracts are rarely subject to competitive bidding because: A) the government is concerned that one firm might monopolize defense contracts B) there is an implicit agreement among defense contractors to "share contracts" C) all defense contractors have essentially the same cost structure D) None of these answers is correct
Answer: D
The biggest advantage of using practical capacity to allocate costs is that it: A) is a value that is readily available B) never causes over or under-allocated overhead C) burdens the user divisions with the costs of unused capacity D) focuses management's attention on unused capacity
Answer: D
The biggest advantage of using practical capacity to allocate costs is that it: A) is a value that is readily available B) never causes over or under-allocated overhead C) burdens the user divisions with the costs of unused capacity D) focuses management's attention on unused capacity
Answer: D
The direct allocation method: A) partially recognizes the services provided among support departments B) is also referred to as the sequential method C) is conceptually the most precise method D) results in allocating only the support costs used by operating departments
Answer: D
The direct allocation method: A) partially recognizes the services provided among support departments B) is also referred to as the sequential method C) is conceptually the most precise method D) results in allocating only the support costs used by operating departments
Answer: D
The revenue allocation may be weighted using physical units when: A) the individual products within the bundle have approximately the same value B) selling prices are unstable and unit costs are difficult to calculate C) other methods cannot be used for various reasons D) All of these answers are correct
Answer: D
True or False: The reciprocal method of support department cost allocation is the most precise method and therefore is used most often.
Answer: FALSE Explanation: The reciprocal method of support department cost allocation is the most precise method but is not often used due to its relative complexity.
The single-rate cost-allocation method may base the denominator choice on: A) master-budget capacity utilisation B) normal capacity utilization C) practical capacity D) All of these answers are correct
Answer: D
The single-rate cost-allocation method may base the denominator choice on: A) master-budget capacity utilization B) normal capacity utilization C) practical capacity D) All of these answers are correct
Answer: D
To give more weight to the product that most likely drives the sales of the bundled product, the revenue allocation should be weighted using: A) selling prices B) unit costs C) physical units D) stand-alone product revenues
Answer: D
To give more weight to the product that most likely drives the sales of the bundled product, the revenue allocation should be weighted using: A) selling prices B) unit costs C) physical units D) stand-alone product revenues
Answer: D
Under the dual-rate cost-allocation method, when fixed costs are allocated based on actual usage then: A) user-division managers are motivated to make accurate long-run usage forecasts B) user-division managers can better plan for the short-run and for the long-run C) the costs of unused capacity are highlighted D) variations in one division's usage affect another division's allocation
Answer: D
Under the dual-rate cost-allocation method, when fixed costs are allocated based on actual usage then: A) user-division managers are motivated to make accurate long-run usage forecasts B) user-division managers can better plan for the short-run and for the long-run C) the costs of unused capacity are highlighted D) variations in one division's usage affect another division's allocation
Answer: D
Under the incremental method of allocating common costs: A) the parties are interested in being viewed as primary users B) each party bears a proportionate share of the total costs in relation to their individual stand-alone costs C) fairness and equity are emphasized D) there is a disincentive to be titled the primary user
Answer: D
Under the incremental method of allocating common costs: A) the parties are interested in being viewed as primary users B) each party bears a proportionate share of the total costs in relation to their individual stand-alone costs C) fairness and equity are emphasized D) there is a disincentive to be titled the primary user
Answer: D
Under which allocation method are one-way reciprocal support services recognised? A) direct method B) artificial cost method C) reciprocal method D) step-down method
Answer: D
Under which allocation method are one-way reciprocal support services recognised? A) direct method B) artificial cost method C) reciprocal method D) step-down method
Answer: D
When using the single-rate method, fixed cost allocation may be based on: A) actual usage B) budgeted usage C) incremental cost allocation D) Either A or B are correct
Answer: D
When using the single-rate method, fixed cost allocation may be based on: A) actual usage B) budgeted usage C) incremental cost allocation D) Either A or B are correct
Answer: D
True or False: Allocating common costs is clear-cut and can best be achieved by using the stand-alone cost- allocation method.
Answer: FALSE Explanation: Allocating common costs is not clear-cut and can generate disputes. Whenever feasible, the rules for the allocation of common costs should be agreed on in advance.
True or False: When allocating the revenues between a bundled product offering, there are only two methods which can be used: 1) the stand-alone revenue-method and 2) the incremental revenue-allocation method.
Answer: FALSE Explanation: Although those are the formula-based methods, it is possible for management judgement to be used in issuing revenue-allocation weights.
True or False: The direct allocation method provides key information for outsourcing decisions regarding support services.
Answer: FALSE Explanation: Complete reciprocal costs of a support department provide key information for outsourcing decisions regarding support services. The direct allocation method does not provide this information.
True or False: Budgeted amounts for a support department will always exceed complete reciprocated costs for that department.
Answer: FALSE Explanation: Complete reciprocated costs equal budgeted amounts for the support department plus any interdepartmental cost allocations, therefore, complete reciprocated costs always exceed budgeted amounts.
True or False: The only choices that a firm has for support department cost allocation rates are to use either a budgeted rate or an actual rate.
Answer: FALSE Explanation: The choices a firm has for support department cost allocation rates include using a budgeted rate, an actual rate, or some negotiated rate.
True or False: The dual cost-allocation method classifies costs into two pools, a budgeted cost pool and an actual cost pool.
Answer: FALSE Explanation: The dual cost-allocation method classifies costs into two pools, a variable cost pool and a fixed cost pool.
True or False: The dual-rate method makes no distinction between fixed and variable costs.
Answer: FALSE Explanation: The dual-rate method makes a distinction between fixed and variable costs.
True or False: The incremental method of allocating common costs often creates the incentive to be the first-ranked user.
Answer: FALSE Explanation: The incremental method creates a disincentive to be the first-ranked user because the first- ranked user receives the greatest allocation of cost.
True or False: The issue of "allowable costs" is NOT applicable in government cost-plus contracts.
Answer: FALSE Explanation: The issue of "allowable costs" is very important in government cost-plus contracts.
True or False: The direct allocation method incorporates mutual services provided among all support departments.
Answer: FALSE Explanation: The reciprocal allocation method incorporates mutual services provided among all support departments.
True or False: An advantage of the single-rate method is that it is easier and always the most accurate cost- allocation choice.
Answer: FALSE Explanation: The single-rate method is the easiest cost allocation method, but it is the least accurate cost-allocation choice.
True or False: The most common method to allocate support department costs is to employ actual rates based on the costs realised during the period.
Answer: FALSE Explanation: This method is very uncommon due to the level of uncertainty it imposes on user divisions.
True or False: Under the incremental method, the first incremental user usually receives the highest allocation of the common costs.
Answer: FALSE Explanation: Under the incremental method of allocating common costs, the primary user receives the highest allocation of the common costs.
True or False: When budgeted cost-allocation rates are used, variations in actual usage by one division affect the costs allocated to other divisions.
Answer: FALSE Explanation: When actual cost-allocations rates are used, variations in actual usage by one division affect the costs allocated to other divisions.
True or False: When actual cost-allocation rates are used, managers of the supplier division are motivated to improve efficiency.
Answer: FALSE Explanation: When budgeted cost-allocation rates are used, managers of the supplier division are motivated to improve efficiency.
True or False: When budgeted cost-allocation rates are used, user-division managers face uncertainty about the allocation rates for that budget period.
Answer: FALSE Explanation: When budgeted cost-allocation rates are used, user-division managers face no uncertainty about the allocation rates for that budget period.
True or False: A common cost is a cost of operating a facility or activity that is shared by two or more users.
Answer: TRUE
True or False: An example of a bundled product is when a computer software manufacturer charges a single price for the spreadsheet, word processing, and presentation software. on the same CD.
Answer: TRUE
True or False: If the government wants to contract a very large scale project with significant uncertainty about what the final cost will be; often a cost-plus contract is awarded to attract qualified contractors who may otherwise NOT be willing to accept the risks inherent in a guaranteed bid price.
Answer: TRUE
True or False: In costs-plus-fixed-fee contracts the allocation of a specific cost may be difficult to defend on the basis of any cause-and-effect reasoning.
Answer: TRUE
True or False: Revenue allocation is required to determine the profitability of individual items within a bundled product.
Answer: TRUE
True or False: The Shapley value method of allocating common costs considers each party as first the primary party and then the incremental party and computes an average allocation.
Answer: TRUE
True or False: The direct method allocates each support department's costs to operating departments only.
Answer: TRUE
True or False: The stand-alone cost allocation method ranks the individual users of a cost object in order of users most responsible for a common cost and then uses these rankings to allocate the costs among the users.
Answer: TRUE
True or False: The stand-alone method may use selling price or unit costs to allocate revenues.
Answer: TRUE
True or False: The stand-alone method of allocating common costs emphasises fairness and equity among users.
Answer: TRUE
True or False: The step-down method allocates support department costs to other support departments and to operating departments in a sequential manner.
Answer: TRUE
True or False: Using the single-rate method transforms the fixed costs per hour into a variable cost to users of that facility.
Answer: TRUE
True or False: Revenue allocation based on the number of physical units is only appropriate when individual products in the bundle are of equal value.
Answer: TRUE Explanation: Revenue allocation based on the number of physical units is only appropriate when individual products in the bundle are of equal value.
True or False: The direct allocation method allows for no recognition of services rendered by support departments to other support departments.
Answer: TRUE Explanation: The direct allocation method allows for no recognition of services rendered by support departments to other support departments.
True or False: The direct method allocates each support department's costs to operating departments but NOT to other support departments.
Answer: TRUE Explanation: The direct method allocates each support department's costs to operating departments but not to other support departments.
True or False: The dual-rate cost-allocation method provides better information for decision making than the single-rate method.
Answer: TRUE Explanation: The dual-rate cost-allocation method provides better information for decision making than the single-rate method.
Describe the Direct Method?
The direct method allocates support department costs only to the operating departments. An advantage of this approach is simplicity. A disadvantage of the approach is that it does not take into account the extent to which some support departments use the services of other support departments. The resultant permutation of costs will not be distributed to the operating departments accurately because they will not have recognised the mutual services provided among all support departments.
Describe the Reciprocal Method?
The reciprocal method allocates support department costs to operating departments by fully recognising the mutual services provided among all support departments. The method is complicated in that it either requires an iterative series of allocations or a linear programming solution to determine the final amounts to be allocated between the support departments which use each others services. It provides the highest level of accuracy but is complex to implement.
Describe the Step-down Method?
The step-down method allocates support department costs to other support departments in a sequential manner that partially recognises the mutual services provided among all support departments. The method usually ranks the support departments in order of the highest percentage of its total services to tother support departments. This provides more accuracy than the direct method with a minimum added level of complexity in the process.
Give examples of bundled products for each of the following industries: a. Resort hotel b. Bank c. Restaurant d. Computer store e. Gasoline service station/convenience store f. Software manufacturer
a. Hotel room plus meals, free drinks, use of athletic facilities, morning newspaper b. Checking account, safe deposit box, wire transfers, certified checks, travelers checks c. Fixed-price meal includes a beverage, appetizer, entree, and dessert d. Computer, keyboard, monitor, printer, software, 1-year contract for the repair and maintenance of the computer e. Gasoline, car wash, coffee f. Two (or more) software products