The Direct Allocation Method ________

question 15

Multiple Choice

The direct allocation method ________.

• A) allocates support-department costs to operating departments by fully recognizing the mutual services provided among all support departments
• B) allocates support-department costs to other support departments and to operating departments in a sequential manner that partially recognizes the mutual services provided among all support departments
• C) allocates each support-department's costs to operating departments only
• D) requires managers to rank the support departments in the order that the step-down allocation is to proceed

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Definitions:

Required Rate of Return

The minimum return investors expect to receive on an investment, considering its risk.

Real Estate Market

The market for buying, selling, and renting properties, including both residential and commercial real estate.

Net Income

The profit of a business after all expenses have been deducted from total revenue.

ROI

Return on Investment (ROI) measures the gain or loss generated on an investment relative to the amount of money invested.