Which of the following is a key consideration in selecting an allocation base? The allocation base...
Which of the following is a key consideration in selecting an allocation base?
- The allocation base should have an indirect association with the cost objective.
- The allocation base should be difficult to measure.
- There should be logical association between the allocation base and the incidence of costs.
- The allocation base should be out of the control of management.
Homework Answers
Option C
There has to be a logical association between the allocation base and the costs in the allocation pool
Add Answer to:
Which of the following is a key consideration in selecting an
allocation base?
The allocation base...
Estimated Estimated Quantity of Activity Indirect Costs Allocation Base Allocation Base Materials handling 95,000 Number of...
Estimated Estimated Quantity of Activity Indirect Costs Allocation Base Allocation Base Materials handling 95,000 Number of kilos 19,000 kilos Packaging 200,000 Number of machine hours 5,000 hours Quality assurance 112.500 Number of samples 1,875 samples $ 407,500 Total indirect costs Actual production information includes the following: Units produced Weight in kilos Machine hours Number of samples Commercial Containers 2,800 containers 12,600 2,240 Travel Packs 50,000 packs 10,000 500 280 750 Jacobson Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells...
Which of the following statement about the selection of allocation base is INCORRECT? A) The default...
Which of the following statement about the selection of allocation base is INCORRECT? A) The default base should always be used. B) A company should strive to select the allocation base that is the most accurate. C) More than one allocation base for a general overhead account can be identified. D) The base selected for a specific account should be related to that account and have a numeric relationship with each profit center.
PA2-7 (Algo) Selecting an Allocation Base and Analyzing Manufacturing Overhead [LO 2-3, 2-5) Amberjack Company is...
PA2-7 (Algo) Selecting an Allocation Base and Analyzing Manufacturing Overhead [LO 2-3, 2-5) Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a different allocation base such as direct labor dollars or machine hours. Actual and estimated data for manufacturing overhead, direct labor cost, direct labor hours,...
The cost allocation base O A. are costs related to a particular cost object that cannot...
The cost allocation base O A. are costs related to a particular cost object that cannot be traced to that cost object in an economically feasible way B. is anything for which a measurement of costs is desired O C. is a systematic way to link an indirect cost or group of indirect costs to cost objects D. is a grouping of individual indirect cost items
Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead...
Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a different allocation base such as direct labor dollars or machine hours. Actual and estimated data for manufacturing overhead, direct labor cost, direct labor hours, and machine hours for the most recent fiscal year are summarized here Estimated...
1. A ___________ is anything for which a measurement of costs is desired. A. Cost Allocation...
1. A ___________ is anything for which a measurement of costs is desired. A. Cost Allocation Base B. Cost Pool C. Cost Object D. Cost Application Base 4. ___________ is the process of assigning indirect costs to products. A. Cost Allocation B. Job Costing Recording C. Cost Pooling D. Cost Tracing
Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead...
Amberjack Company is trying to decide on an allocation base to
use to assign manufacturing overhead to jobs. The company has
always used direct labor hours to assign manufacturing overhead to
products, but it is trying to decide whether it should use a
different allocation base such as direct labor dollars or machine
hours.
Actual and estimated data for manufacturing overhead, direct
labor cost, direct labor hours, and machine hours for the most
recent fiscal year are summarized here:
Estimated...
12. Which of the following statements is (are) false? (I) The selection of an allocation base in the direct method...
12. Which of the following statements is (are) false? (I) The selection of an allocation base in the direct method is easier than the selection of an allocation base in the step method. (Il) One reason to allocate service department costs to user departments is to encourage the user departments to monitor their use of the service department costs. A. Only I is false. B. Only II is false. C. Both I and II are false. D. Neither I nor...
please answer this question fully Amberjack Company is trying to decide on an allocation base to...
please answer this question fully Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a different allocation base such as direct labor dollars or machine hours. Actual and estimated data for manufacturing overhead, direct labor cost, direct labor hours, and machine hours for the most recent fiscal...
4. Which of the following sentences is FALSE (only one correct answer): O O O O...
4. Which of the following sentences is FALSE (only one correct answer): O O O O Full cost comprehends all the resources used for a determined cost object. The "traditional" allocation bases allocate the indirect costs apportioned to the use of direct resources, that means proportional to volume. Direct costs are attributable to a cost object in an objective way. The full cost of production comprehends the cost of raw materials, transformation costs ar a fair share of the period...
Estimated Estimated Quantity of Activity Indirect Costs Allocation Base Allocation Base Materials handling 95,000 Number of kilos 19,000 kilos Packaging 200,000 Number of machine hours 5,000 hours Quality assurance 112.500 Number of samples 1,875 samples $ 407,500 Total indirect costs Actual production information includes the following: Units produced Weight in kilos Machine hours Number of samples Commercial Containers 2,800 containers 12,600 2,240 Travel Packs 50,000 packs 10,000 500 280 750 Jacobson Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells...
PA2-7 (Algo) Selecting an Allocation Base and Analyzing Manufacturing Overhead [LO 2-3, 2-5) Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a different allocation base such as direct labor dollars or machine hours. Actual and estimated data for manufacturing overhead, direct labor cost, direct labor hours,...
The cost allocation base O A. are costs related to a particular cost object that cannot be traced to that cost object in an economically feasible way B. is anything for which a measurement of costs is desired O C. is a systematic way to link an indirect cost or group of indirect costs to cost objects D. is a grouping of individual indirect cost items
Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a different allocation base such as direct labor dollars or machine hours. Actual and estimated data for manufacturing overhead, direct labor cost, direct labor hours, and machine hours for the most recent fiscal year are summarized here Estimated...
Amberjack Company is trying to decide on an allocation base to
use to assign manufacturing overhead to jobs. The company has
always used direct labor hours to assign manufacturing overhead to
products, but it is trying to decide whether it should use a
different allocation base such as direct labor dollars or machine
hours.
Actual and estimated data for manufacturing overhead, direct
labor cost, direct labor hours, and machine hours for the most
recent fiscal year are summarized here:
Estimated...
12. Which of the following statements is (are) false? (I) The selection of an allocation base in the direct method is easier than the selection of an allocation base in the step method. (Il) One reason to allocate service department costs to user departments is to encourage the user departments to monitor their use of the service department costs. A. Only I is false. B. Only II is false. C. Both I and II are false. D. Neither I nor...
4. Which of the following sentences is FALSE (only one correct answer): O O O O Full cost comprehends all the resources used for a determined cost object. The "traditional" allocation bases allocate the indirect costs apportioned to the use of direct resources, that means proportional to volume. Direct costs are attributable to a cost object in an objective way. The full cost of production comprehends the cost of raw materials, transformation costs ar a fair share of the period...
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