Which One of the Following Methods of Cost Allocation Is

question 61

Multiple Choice

Which one of the following methods of cost allocation is completed by taking the service flows to production departments only and determining each production department's share of that service?

• A)Direct method.
• B)Indirect method.
• C)Step method.
• D)Reciprocal method.
• E)Cross-functional method.

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Definitions:

Monopoly

A market structure characterized by a single seller who has exclusive control over a product or service, with no close substitutes.

Natural Monopoly

A market situation where the most cost-efficient production level is achieved by a single firm due to high fixed or start-up costs, making it impractical for new entrants.

Marginal Cost

The change in total cost that arises when the quantity produced is incremented by one unit.

Output

The total amount of products or services produced by a company, industry, or economy within a specific period.