The Two Methods for Allocating Interdepartmental Service Costs Are The

question 14

Multiple Choice

The two methods for allocating interdepartmental service costs are the:

• A) step- down and direct
• B) step- down and indirect
• C) step- up and variable
• D) variable and fixed

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Definitions:

Basis

The difference between the spot price of an asset and the futures price of the same asset.

Long Hedger

An investor who purchases futures contracts or the underlying asset to protect against potential price increases.

Short Hedger

An investor who enters into contracts to protect against potential losses from declining prices in the assets they hold.

Decrease

A reduction in quantity, size, or intensity of a particular activity, value, or level.