Cost Pools Should Be Charged to Responsibility Centers by Using

question 77

Multiple Choice

Cost pools should be charged to responsibility centers by using:

• A) budgeted amounts of allocation bases because the cost allocation to one responsibility center should influence the allocations to others.
• B) budgeted amounts of allocation bases because the cost allocation to one responsibility center should not influence the allocations to others.
• C) actual amounts of allocation bases because the cost allocation to one responsibility center should influence the allocations to others.
• D) actual amounts of allocation bases because the cost allocation to one responsibility center should not influence the allocations to others.
• E) some other approach.

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Definitions:

Retained Earnings

Accumulated net income that has been retained by a company rather than distributed to its owners as dividends.

Shareholders

Individuals or entities that own shares in a corporation, giving them ownership interest in the company.

Cost Method

An accounting method used to record investments, where the investment is recorded at its acquisition cost without adjusting for changes in market value.

Investment Account

An Investment Account is a financial account held by an investor with a brokerage firm, bank, or custodian that holds securities and other investments.