Using the Appropriate Rationale, Which of the Following Scenarios Represents

question 11

Multiple Choice

Using the appropriate rationale, which of the following scenarios represents the proper determination of the order in which management should sequence support department allocations under the sequential method of allocating support department costs to production departments?

• A)A Janitorial support department with 50 employees should be allocated earlier than a Cafeteria support department with 25 employees.
• B)A Maintenance department with a less accurate cost driver should be allocated earlier than a Cafeteria support department with an extremely accurate cost driver.
• C)A Purchasing support department that serves one production department should be allocated earlier than a Janitorial support department serving five production departments.
• D)A Janitorial support department with a cost of $500,000 should be allocated earlier than a Purchasing support department with a cost of $30,000.

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Definitions:

Work in Process

Goods that are in the process of being manufactured but are not yet complete.

Part No.

A unique identifier assigned to a specific part or component within a manufacturing system or inventory.

Work in Process Inventory

Inventory that includes all materials, labor, and overhead costs for products in the manufacturing process but not yet completed.

Direct Materials Inventory

The stock of raw materials that will be directly used in the production of goods, readily available for the manufacturing process.