307 Midterm Two

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Multiple or departmental overhead rates are considered preferable to a single or plantwide overhead rate when:
various products are manufactured that do not pass through the same departments or use the same manufacturing techniques
when allocating support department costs for the purpose of performance evaluation, budgeted costs are allocated versus actual:
to avoid allocating uncontrollable inefficiencies to user departments
a dual rate allocation system may be preferable to a single-rate system in a situation where:
usage of support department services varies from period to period
a primary purpose of allocating common costs to joint products is to determine
the inventory cost of joint products for financial reporting
if we are looking for the most accurate cost allocation, the most important criterion would be
using homogeneous costs pools
allocation of service department costs to the product departments is necessary to
determine overhead rates
in joint-product costing and analysis, which one of the following costs is relevant when deciding the point at which a product should be should to maximize profits?
separable costs after the split off point
joint costs are useful for
determining inventory cost for accounting purposes
the principal disadvantage for using the physical quantity method of allocating joint costs is that
costs assigned to inventories may have no relationship to value
a company produces three main joint products and one by-product. the by-product's relative sales value is quite low compared with that of the main products. the preferable accounting for the by-product's net realizable value is as
a reduction in the common cost to be allocated to the three main products
the distinction between joint products and by-products is largely dependent on
market value
in allocating factory service department costs to producing departments, which one of the following items would most likely be used as an activity base?
units of electric power consumed
there are several methods for allocating service department costs to the production departments. the method that recognizes service provided by one service department to another, but does not recognize reciprocal interdepartmental service is
step-down method
when allocating costs from one department to another, a dual rate cost allocation method may be used. the dual rate cost allocation method is most useful when
costs are separated into variable cost and fixed cost sub pools