Fairfield Company Allocates Common Building Department Costs to Producing Departments

question 55

Multiple Choice

Fairfield Company allocates common Building Department costs to producing departments (P1 and P2) based on space occupied, and it allocates common Personnel Department costs based on the number of employees. Space occupancy and employee data are as follows: $$\begin{array} { l c c c c } & \text { Building } & \text { Personnel } & \text { Dept. P1 } & \text { Dept. P2 } \\\text { Space occupied } & 2,000 \mathrm { ft } & 10,000 \mathrm { ft } & 120,000 \mathrm { ft } & 70,000 \mathrm { ft } \\\text { Employees } & 6 & 10 & 80 & 50\end{array}$$ If Fairfield Company uses the direct allocation method, the ratio representing the portion of building costs allocated to Department P1 is

• A)190,000/202,000.
• B)2,000/120,000.
• C)120,000/202,000.
• D)120,000/190,000.

Analyze the effects of forward contracts and options on financial risk management.

Determine the effective use of hedging in foreign exchange risk management.

Calculate the foreign exchange gain or loss on transactions.

Understand the concept of fair value and cash flow hedges in accounting.

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Definitions:

Perceptual Sensitivity

An organism’s ability to detect a signal.

Decision Criteria

An organism’s rule for how much evidence it needs before responding.

False Alarms

Instances where an anticipated negative outcome or threat is signaled but does not actually materialize.

Pattern Theory

suggests that sensory information is represented in the brain as patterns of neural firing, which are recognized and interpreted based on learned experiences.