Match Each Description Below to the Appropriate Method for Allocating

question 109

Short Answer

Match each description below to the appropriate method for allocating costs (a-c).
-Overhead costs are first directly traced or distributed to support and production activities, then support activity costs are allocated to production activities based on the amount of support activity used by each production activity; production activity costs are applied to the products using cost drivers for each production activity.
A)Single plantwide overhead rate
B)Multiple production department rates
C)Activity-based costing

• A)Single plantwide overhead rate
• B)Multiple production department rates
• C)Activity-based costing

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Definitions:

Straight-Line Depreciation

A mechanism for spreading the expenditure of a tangible asset over its longevity in equal annual fractions.

Interest Payments

The regular payments made by a borrower to a lender as compensation for the use of borrowed money, usually calculated as a percentage of the outstanding principal.

CCA Class

In the context of Canadian taxation, refers to the categorization of depreciable property for the purpose of calculating capital cost allowance (tax deductions for depreciation).

Manufacturing Costs

Expenses directly related to the production of goods, including raw materials, labor, and factory overhead.