Use the Information Below to Answer the Following Question(s)

question 145

Multiple Choice

Use the information below to answer the following question(s) .The owner of Hi-Tech Fiberglass Fabricators Inc.is interested in using the reciprocal allocation method.The following data from operations were collected for analysis.Budgeted manufacturing overhead costs:
Service furnished:
By Plant Maintenance (budgeted labour hours)
By Data Processing (budgeted computer time)

-Which of the following is a valid conclusion, in comparing the three allocation methods?

• A)The reciprocal method is conceptually inferior.
• B)The direct method is viewed as too complex by most organizations.
• C)The step-down method is viewed as too complex by most organizations.
• D)Many managers find the step-down method too simple.
• E)Many managers find the reciprocal method difficult to understand.

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Definitions:

Normative Statement

An assertion that expresses a value judgment or opinion, discussing what ought to be rather than what is.

Scientists

Individuals engaged in systematic activities to acquire knowledge that describes and predicts the natural world, typically through observation and experimentation.

Policy Advisers

Experts who offer advice on public or corporate policy to decision-makers.

Microeconomics

The branch of economics that studies the behavior of individuals and small impacting organizations in making decisions on the allocation of limited resources.