The Method That Allocates Costs in Each Cost Pool Using

question 78

Multiple Choice

The method that allocates costs in each cost pool using the same rate per unit is known as the ________.

• A) incremental cost-allocation method
• B) reciprocal cost-allocation method
• C) single-rate cost allocation method
• D) dual-rate cost-allocation method

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Definitions:

Book Value

The value of an asset as recorded in the company's books or financial records, typically reflecting its original cost minus depreciation.

Accumulated Depreciation

Accumulated depreciation is the total depreciation expense that has been recorded for an asset over its life.

Lump-sum Price

This is a total amount agreed upon for a contract that is not itemized or broken down into individual costs or charges.

Relative Market Values

The comparison of an item’s market price to other similar items in the relevant market.