Allocated Indirect Cost Information Can Sometimes Be Low Quality

question 31

Multiple Choice

Allocated indirect cost information can sometimes be low quality. Allocating indirect costs can be improved by:

• A) cross divisional co-operation
• B) using the same cost driver for every cost pool
• C) Neither A or B
• D) Both A and B

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Definitions:

Transformational Representation

The cognitive process of representing complex information and structures differently in the mind to facilitate understanding or problem-solving.

Situational Awareness

The perception of the elements in the environment within a volume of time and space, the comprehension of their meaning, and the projection of their future status.

7 ± 2

A theory suggesting that the average person can hold about 7 (plus or minus 2) items in their working memory.

Miller

Refers to George A. Miller, a cognitive psychologist best known for his theory regarding the limit of short-term memory capacity, often summarized as "seven, plus or minus two" pieces of information.