Question

Which of the following departments is necessary for production, but is not directly involved in production?...

Which of the following departments is necessary for production, but is not directly involved in production?

Manufacturing department

Construction department

Production department

Maintenance department

Support departments are normally accounted for as a(n) __________.

  1. investment center
  2. cost center
  3. profit center
  4. None of the above

. When the ________ method is used to apply overhead to products, support department costs are simply combined with all other overhead costs.

  1. multiple production department rates
  2. single plantwide rate
  3. activity-based costing
  4. None of the above
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Answer #1

Answer: Maintenance department

Manufacturing department, Construction department, and Production department are all involved in actual production while the Maintenance department is not directly involved in production but is necessary for production.

Answer: b. cost center

Support departments are normally accounted for as a cost center, the costs of which are allocated to the production departments.

Answer: b. single plantwide rate

Under the single plantwide rate method, all overheads are combined and applied based on a common cost driver or allocation base.

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