From above, reciprocal service method is the most difficult but
most accurate method for allocating service department costs to
production departments.
Explanation:
The Reciprocal Method: The reciprocal method is the most accurate
for allocating service department costs because it recognizes
reciprocal services among service departments. Under the reciprocal
cost, the relationship between service departments is recognized
and the cost is allocated to and from each service department for
services provided. It is also the most complicated method; because
it requires solving a set of simultaneous linear equations.
Which of the following is the most difficult but most accurate of the commonly used methods...
When the __________ method is used to apply overhead to products, overhead costs are first directly traced or distributed to support and manufacturing departments. activity-based costing single plantwide rate multiple production department rates None of the above In the context of activity-based costing, transferring overhead costs to support and production departments is referred to as __________ overhead costs. assigning allocating applying distributing In the context of allocating support department costs to production departments, which of the following methods is the...
Which of the following methods of cost allocation is not one of the four common methods used to allocate the joint costs incurred in a production process? a. Market value at split-off method b. Weighted average method c. Net realizable value method d. Reciprocal services method ------------------------ Which of the following is not a support department? a. The department that produces pizza boxes in a paper container manufacturing facility b. The Janitorial Department in a plastic salad container manufacturing facility...
Which of the following statements is true about the sequential method of allocating support department costs to production departments? a. The sequential method captures some but not all the inter-support-department services by allocating support departments to other support departments and production departments in a series of steps. b. The sequential method is less accurate than the direct method. c. The sequential method is also known as the step-up method. d. The sequential method requires that the same cost driver be...
Why is the direct method of support department cost allocation less accurate than the sequential and reciprocal services methods? How does management determine the order in which support department costs are allocated under the sequential method?
Which of the following statements is false regarding the six-step process as it is utilized in the reciprocal services method? a. Steps 1–3 of the reciprocal services method are the same as for the direct and sequential methods. b. In Step 5, support department costs are allocated sequentially among the departments by using a single algebraic equation. c. In Step 4, the proportional usage of each support department's cost driver by the other departments to which its costs are to...
Which of the following statements explains the major difference between the sequential method and the reciprocal services method? a. The reciprocal services method is easier to implement than the sequential method. b. Under the reciprocal services method, some but not all inter-support-department services are allocated to support departments. c. The reciprocal services method is less accurate than the sequential method. d. Under the reciprocal services method, all inter-support-department services are allocated to support departments.
Support department cost allocation-reciprocal services method Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on asset value. Information about each department is provided in the following table: Maintenance Security Cutting Sewing Department Department Department Department Machine hours 800 2,000 6,800 11,200 Asset value $2,000...
Support department cost allocation-reciprocal services method Davis Snowflake Coproduces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on asset value. Information about each department is provided in the following table: Maintenance Security Cutting Sewing Department Department Department Department Machine Hours 800 2,000 7,200 10,800 Asset value $2.000 $1,470 $1,500...
eBook Calculator E Print Item Support activity cost allocation Jake's Gems mines and produces diamonds, rubies, and other gems. The gems are produced by way of the Mining and Cutting activities. These production activities are supported by the Maintenance and Security activities. Security costs are allocated to the production activities based on asset value. Maintenance costs are normally allocated based on machine hours. However, Maintenance costs typically correlate more with the number of service calls. Information regarding the activities is...
support activity cost allocation for Jakes Gems Coraded OievVOIR CtN etook Support activity cost allocation Jake's Gems mines and produces diamonds, rubies, and other gems. The gems are produced by way of the Miging and Cutting activities. These production activities are supported by the Maintenance and Security activities. Security costs are allocated to the production activities based on asset value. Maintenance costs are normally allocated based on machine hours. However, Maintenance costs typically correlate more with the number of service...