Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Textbook Question
Chapter 4, Problem 19MCQ
(Appendix 4B) The method that assigns support department costs only to producing departments in proportion to each department’s usage of the service is known as
- a. the sequential method.
- b. the proportional method.
- c. the reciprocal method.
- d. the direct method.
- e. None of these.
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Check out a sample textbook solutionStudents have asked these similar questions
S1 - After service department costs are allocated to other departments, costs are re-circulated back to that service department, under the step method. S2 - When using the direct method of allocating service department costs, it is necessary that the cost of the service department which serves the greatest number of departments is allocated first.
a. Only S1 is true
b. Only S2 is true
c. Both S1 & S2 are true
d. Both S1 & S2 are false
1. In the context of allocating support department costs to production departments, which of the following
methods is the easiest but the least accurate? a. Step-down method b. Reciprocal services method c. Sequential
method d. Direct method 2. In the context of allocating support department costs to production departments,
which of the following methods is the most difficult but the most accurate? a. Reciprocal services method b.
Step-down method c. Direct method d. Sequential method considers all inter-support- 3. In the context of
allocating support department costs to production departments, the department services and is the most
difficult to implement when a large number of departments is involved.
Q. Allocate the service department costs to the two operating departments using(i) the step-down method (Allocate Administrative Services first)(ii) the step-down method (Allocate Maintenance Services first)
Chapter 4 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 4 - What are job-order costing and process costing?...Ch. 4 - Give some examples of service firms that might use...Ch. 4 - What is normal costing? How does it differ from...Ch. 4 - Why are actual overhead rates seldom used in...Ch. 4 - Explain how overhead is assigned to production...Ch. 4 - What is underapplied overhead? When Cost of Goods...Ch. 4 - What is overapplied overhead? When Cost of Goods...Ch. 4 - Suppose that you and a friend decide to set up a...Ch. 4 - Why might a company decide to use departmental...Ch. 4 - What is the role of materials requisition forms in...
Ch. 4 - Carver Company uses a plantwide overhead rate...Ch. 4 - Prob. 12DQCh. 4 - Is the cost of a job related to the price charged?...Ch. 4 - If a company decides to increase advertising...Ch. 4 - How can a departmental overhead system be...Ch. 4 - (Appendix 4B) Describe the difference between...Ch. 4 - Prob. 17DQCh. 4 - Prob. 18DQCh. 4 - Prob. 19DQCh. 4 - (Appendix 4B) Explain the difference between the...Ch. 4 - Which of the following statements is true? a....Ch. 4 - The ending balance of which of the following...Ch. 4 - In a normal costing system, the cost of a job...Ch. 4 - The predetermined overhead rate equals a. actual...Ch. 4 - Prob. 5MCQCh. 4 - Applied overhead is a. an important part of normal...Ch. 4 - The overhead variance is overapplied if a. actual...Ch. 4 - Which of the following is typically a job-order...Ch. 4 - Which of the following is typically a...Ch. 4 - Prob. 10MCQCh. 4 - Prob. 11MCQCh. 4 - Prob. 12MCQCh. 4 - Wilson Company has a predetermined overhead rate...Ch. 4 - (Appendix 4A) When a job costing 2,000 is finished...Ch. 4 - (Appendix 4B) Those departments responsible for...Ch. 4 - Prob. 16MCQCh. 4 - (Appendix 4B) An example of a producing department...Ch. 4 - (Appendix 4B) An example of a support department...Ch. 4 - (Appendix 4B) The method that assigns support...Ch. 4 - (Appendix 4B) The method that assigns support...Ch. 4 - (Appendix 4B) The method that assigns support...Ch. 4 - Predetermined Overhead Rate, Overhead Application...Ch. 4 - Overhead Variance (Over- or Underapplied), Closing...Ch. 4 - Use the following information for Brief Exercises...Ch. 4 - Use the following information for Brief Exercises...Ch. 4 - Prepare Job-Order Cost Sheets, Predetermined...Ch. 4 - Use the following information for Brief Exercises...Ch. 4 - Use the following information for Brief Exercises...Ch. 4 - Predetermined Overhead Rate, Overhead Application...Ch. 4 - Overhead Variance (Over- or Underapplied), Closing...Ch. 4 - Use the following information for Brief Exercises...Ch. 4 - Use the following information for Brief Exercises...Ch. 4 - Prepare Job-Order Cost Sheets, Predetermined...Ch. 4 - Use the following information for Brief Exercises...Ch. 4 - Use the following information for Brief Exercises...Ch. 4 - Job-Order Costing versus Process Costing a....Ch. 4 - Job-Order Costing versus Process Costing a. Auto...Ch. 4 - Calculating the Predetermined Overhead Rate,...Ch. 4 - Calculating the Predetermined Overhead Rate,...Ch. 4 - Calculating Departmental Overhead Rates and...Ch. 4 - Job-Order Costing Variables On July 1, Job 46 had...Ch. 4 - Source Documents For each of the following...Ch. 4 - Applying Overhead to Jobs, Costing Jobs Jagjit...Ch. 4 - Applying Overhead to Jobs, Costing Jobs Gorman...Ch. 4 - Balance of Work in Process and Finished Goods,...Ch. 4 - Job-Order Cost Sheets, Balance in Work in Process...Ch. 4 - Cost Flows Consider the following independent...Ch. 4 - Job Cost Flows Roseler Company uses a normal...Ch. 4 - Calculation of Work in Process and Cost of Goods...Ch. 4 - (Appendix 4A) Journal Entries Yurman Inc. uses a...Ch. 4 - (Appendix 4B) Direct Method of Support Department...Ch. 4 - (Appendix 4B) Sequential Method of Support...Ch. 4 - Overhead Application and Job-Order Costing Heurion...Ch. 4 - Prob. 54PCh. 4 - Calculating Ending Work in Process, Income...Ch. 4 - Overhead Applied to Jobs, Departmental Overhead...Ch. 4 - Overhead Rates, Unit Costs Folsom Company...Ch. 4 - Calculate Job Cost and Use It to Calculate Price...Ch. 4 - (Appendix 4A) Unit Cost, Ending Work in Process,...Ch. 4 - (Appendix 4A) Journal Entries, Job Costs The...Ch. 4 - (Appendix 4A) Predetermined Overhead Rates,...Ch. 4 - (Appendix 4A) Overhead Application, Journal...Ch. 4 - (Appendix 4A) Journal Entries, T-Accounts Lowder...Ch. 4 - (Appendix 4B) Support Department Cost Allocation...Ch. 4 - (Appendix 4B) Support Department Cost Allocation:...Ch. 4 - Overhead Assignment: Actual and Normal Activity...Ch. 4 - Tonya Martin, CMA and controller or the Parts...
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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.Similar questions
- What are the differences between single and dual rate allocation? Explain with suitable examples. b) Provide a numerical example for single rate allocation and dual rate allocation and explain the process of allocating support department costs to the operating department, assuming that: The company has two support departments “S1 & S2” and two operating departments “O1 & O2.” The company use the direct method to allocate support department costs. Note: You are required to provide numerical examples assuming the values of your own and they should not be copied from any sources.arrow_forwardIf two support departments service the same number of departments, which support department's costs should be allocated first when using the sequential method? The support department with the least cost. The support department that provides the least support to other support departments. The support department that provides the most support to other support departments. The support department that provides the most support to the producing departments.arrow_forwardThe only method of allocation of service department costs to producing departments that considers reciprocal services is called the a. Step method b. Direct method c. none of the choices d. Algebraic methodarrow_forward
- 1. Compare and explain differences in the support-department costs allocated to eachproduction department. 2. What approaches might be used to decide the sequence in which to allocate supportdepartments when using the step-down method?arrow_forwardWhy is the diect method of support department cost allocation less accurate than the sequential and reciproval services methods?arrow_forward(Appendix 4B) The method that assigns support department costs by giving full recognition to support department interactions is known as a. the sequential method. b. the proportional method. c. the reciprocal method. d. the direct method. e. None of these.arrow_forward
- When using the sequential distribution method of distributing service department costs, if a service department receives services from other service departments, will those costs be allocated back to it even though it was the first service department distributed?arrow_forward(Appendix 4B) The method that assigns support department costs by giving partial recognition to support department interactions is known as a. the sequential method. b. the proportional method. c. the reciprocal method. d. the direct method. e. None of these.arrow_forwardWhich method of allocating support department costs is completed by taking the service flows to production departments only and determining each production department's share of that service? Question options: a) average method. b) step method. c) direct method. d) reciprocal method.arrow_forward
- Which of the following is the most difficult but most accurate of the commonly used methods for allocating support department costs to production departments? Oa. reciprocal services method Ob. direct method Oc. activity-based management method Od. sequential methodarrow_forwardThe step-down allocation method: a. recognizes the total amount of services that support departments provide to each other b. allocates complete reciprocated costs c. typically begins with the support department that provides the highest percentage of its total services to other support departments d. offers key input for outsourcing decisionsarrow_forwardThe order in which the costs of service departments are allocated will affect the amounts allocated to an operating department when the direct method is used. True or False True Falsearrow_forward
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