Cost Accounting - Ch.15 T/F
Budgeted amounts for a support department will always exceed complete reciprocated costs for that department.
F
It is most appropriate to base revenue allocation on the number of physical units when individual products in the bundle are of unequal value.
F
The direct allocation method highlights recognition of services rendered by support departments to other support departments.
F
The direct allocation method provides key information for outsourcing decisions regarding support services.
F
The dual cost-allocation method classifies costs into two pools, a budgeted cost pool and an actual cost pool.
F
The incremental method of allocating common costs often creates the incentive to be the first-ranked user.
F
The single-rate cost-allocation method provides better information for decision making than the dual-rate method.
F
Under the incremental method, the first incremental user usually receives the highest allocation of the common costs.
F
When budgeted cost-allocation rates are used, user-division managers face uncertainty about the allocation rates for that budget period.
F
When budgeted cost-allocation rates are used, variations in actual usage by one division affect the costs allocated to other divisions.
F
All contracts with U.S. government agencies must comply with the cost accounting standards issued by the Cost Accounting Standards Board.
T
An example of a bundled product is when a resort hotel charges a single price for lodging, food, and recreational activities.
T
Revenue allocation is required to determine the profitability of individual items within a bundled product.
T
The reciprocal allocation method incorporates mutual services provided among all support departments.
T
The stand-alone method may use selling price or unit costs to allocate revenues.
T
The stand-alone method of allocating common costs emphasizes fairness and equity among users.
T
Under the incremental revenue-allocation method, there is an incentive to be the first-ranked user.
T
Using the single-rate method transforms the fixed costs per hour into a variable cost to users of that facility.
T
When budgeted cost-allocation rates are used, managers of the supplier division are motivated to improve efficiency.
T
Without explicit written cost-plus contracts, producer costs can be passed on to the buyer.
T
