The Departmental Approach of Cost Allocation Recognizes That the Typical

question 86

Multiple Choice

The departmental approach of cost allocation recognizes that the typical manufacturing operation involves which type(s) of departments?

• A)Service departments and production departments.
• B)Production departments and assembly departments.
• C)Joint product departments and separable departments.
• D)Cost pools and cost objects.
• E)Support departments and other service departments.

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Definitions:

LIFO Method

An inventory valuation method that assumes the last items added to inventory are the first ones to be sold (Last In, First Out).

Periodic Inventory System

An inventory valuation method where the ending inventory and cost of goods sold are determined at the end of the accounting period.

Subsidiary Ledger

A detailed ledger that contains the individual accounts related to a specific category, supplementing the general ledger.

Consignment

An arrangement where goods are left with a third party to sell, but ownership remains with the supplier until the goods are sold.