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

question 24

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)

-The step-down allocation method

• A)typically begins with the support department that provides the highest percentage of its total services to other support departments.
• B)recognizes the total amount of services that support departments provide to each other.
• C)allocates complete reciprocated costs.
• D)offers key input for outsourcing decisions.
• E)allocates support department costs to production departments only.

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Definitions:

Accounts Payable

Liabilities of a business that represent amounts owed to creditors for goods and services the company has received but not yet paid for.

Restructuring Charges

Expenses associated with reorganizing a company, which may include layoffs, plant closures, or other major operational changes.

Continuing Operations

The segments or parts of a business expected to continue operating and contributing to earnings into the foreseeable future.

Layoffs

A reduction in a company's workforce to save costs or due to organizational restructuring.