Question

Which of these is the most clear and unbiased basis for cost allocation?

	Ability-to-bear
	Benefit Received

	Cause-and-effect
	None of these

Which of these is(are) ethical issues for cost allocation

	Incentive to shift
	Equity or fair-share

	increasing costs of products purchased in high-tax countries
	All of these

What is the reason for "incentive to shift costs from competitive products to cost-plus-based products"?

	Increase revenues and profits
	Reducing tax liability

	Both of these
	Neither of these

Which of the general approaches for allocating overhead does so with a single cost pool?

	Departmental approach
	Volume-based Approach

	Activity-based approach
	None of these

Which of the following is(are) methods to allocate service department costs?

	Direct method
	Step method

	Reciprocal method
	All of these

Which of the following methods applies costs of one service department to all of the remaining departments, then the next service department, and repeats until all service department costs are allocated to production departments?

	Direct method
	Step method

	Reciprocal method
	None of these

Which of the following methods allocates service costs on the basis of reciprocal costs to each department (service and production) and repeats until there are no more costs left in the service departments and all costs have been allocated to the production departments?

	Direct method
	Step method

	Reciprocal method
	None of these

What is the final step for each of the service department cost allocation methods?

	Allocate service costs to the production departments
	Allocate costs from prodcution departments to products

	Both of these
	Neither of these

Which of the following is joint costs?

	Costs incurred processing joint products up to the split-off point
	Costs incurred processing joint products AFTER the split-off point

	All fo the costs
	None of the costs

What is the main difference between joint products and by-products?

	The sales value of the products
	The cost of the products

	How much work went into making the products
	None of these

Answer 1

1. Which of these is the most clear and unbiased basis for cost allocation?

Answer -Cost and Effect Method

2. Which of these is(are) ethical issues for cost allocation

Answer -All of above, all mentioned below can have ethical issues ]

Incentive to shift

Equity or fair share

Increasing costs of products purchased in high-tax countries

3.What is the reason for "incentive to shift costs from competitive products to cost-plus-based products"?

Answer -Increase Revenue and Profits

4.Which of the general approaches for allocating overhead does so with a single cost pool

Answer -Department wise allocation

5. Which of the following is(are) methods to allocate service department costs

Answer -All of above.

6.Which of the following methods allocates service costs on the basis of reciprocal costs to each department (service and production) and repeats until there are no more costs left in the service departments and all costs have been allocated to the production departments?

Answer Steo methor or step down method

7-Which of the following methods allocates service costs on the basis of reciprocal costs to each department (service and production) and repeats until there are no more costs left in the service departments and all costs have been allocated to the production departments?

Answer -Reciprocal method

8-What is the final step for each of the service department cost allocation methods?

Answer Allocate service costs to the production departments

9-Which of the following is joint costs?

Costs incurred processing joint products up to the split-off point

10-What is the main difference between joint products and by-products?

Answer -None of above