Which of the Following Is an Appropriate Base to Distribute

question 54

Multiple Choice

Which of the following is an appropriate base to distribute the cost of building depreciation to responsibility centres?

• A)Number of employees in the responsibility centres.
• B)Budgeted sales dollars of the responsibility centres.
• C)Square feet occupied by the responsibility centres.
• D)Budgeted net income of the responsibility centres.
• E)Total budgeted direct operating costs of the responsibility centres.

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Definitions:

Control Limits

Statistically determined lines on a control chart outside of which a process is considered to be out of control or unnatural variations.

Assignable Variation

Changes within a process stemming from particular causes, instead of occurring randomly.

Pooled Standard Deviation

A statistical measure used to estimate the standard deviation of two or more samples by combining variances in a weighted average.

Assignable Cause Variation

Variability in a process that can be traced to a specific reason or cause, often indicating issues that need correction.