The Use of Dual Rates in a Cost Allocation System

question 21

Multiple Choice

The use of dual rates in a cost allocation system assumes that common costs can be:

• A) separated into their fixed and variable components.
• B) traced directly to a specific division or manager.
• C) allocated based on a physical quantities measure.
• D) assigned to an investment responsibility center.

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Definitions:

Price Fixing

An illegal agreement among competitors to control prices, usually aimed at increasing prices or reducing competition in the market.

Per Se Violation

A per se violation is an act that is inherently illegal, without the need for additional proof of its harmfulness or malicious intent.

Sherman Antitrust Act

A landmark U.S. law passed in 1890 aimed at promoting competition by prohibiting monopolies and other forms of anticompetitive behavior.

2004 Amendments

Refers to changes or modifications made to laws or regulations in the year 2004.