A Method of Allocating Support Department Costs That Gives Partial

question 64

Short Answer

A method of allocating support department costs that gives partial consideration to interactions among support departments.

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control those policies. It is often evidenced by ownership of 20% to 50% of the voting stock of the investee.

Net Income

The residual financial gain of a company post all expenditures and taxes being deducted from its revenues.

Book Value

The value left over from a company’s assets once its obligations are deducted, as listed on the balance sheet.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control those policies.