The Support Departments Typically Found in Manufacturing and Nonmanufacturing Organizations

question 43

Essay

The support departments typically found in manufacturing and nonmanufacturing organizations are as follows:
Cafeteria
Personnel
Maintenance
Purchasing
Accounting
Required:
For each of the preceding support departments, indicate potential bases that could be used to allocate costs to the producing departments.

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Definitions:

Break-even Point

The level of production or sales at which total costs equal total revenues, resulting in no profit or loss.

Sales Mix

The composition of different products or services that a company sells, impacting profitability and overall sales.

Fixed Expenses

Recurring costs that remain relatively constant regardless of business activity levels, including property leases and insurance premiums.

High-low Method

An approach to estimating the fixed and variable components of costs by analyzing the highest and lowest levels of activity.