To Avoid Passing on Inefficiencies of the Support Departments, Support

question 23

Multiple Choice

To avoid passing on inefficiencies of the support departments, support department costs should be allocated using:

• A) an actual cost allocation rate
• B) a budgeted cost allocation rate
• C) only fixed costs per unit of service
• D) only variable costs per unit of service

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Definitions:

Component Parts

Individual pieces or materials that are assembled or used together to create a finished product or to complete a larger assembly.

Private Distributor Brands

Brands, which may cost less than manufacturer brands, that are owned and controlled by a wholesaler or retailer.