Which of the Following Is One of the Methods of Allocating

question 147

Multiple Choice

Which of the following is one of the methods of allocating support department costs to operating departments?

• A) dual-cost allocation method
• B) incremental method
• C) step-down method
• D) single-rate cost allocation method

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Definitions:

Incremental Value

Incremental value is the additional value generated by a business from undertaking a specific project or action, compared to not doing it.

Outstanding Stock

Another term for outstanding shares; represents the total shares held by all shareholders, including shares held by institutional investors and company officials.

Equity-Financed

A form of business funding where funds are raised by issuing shares of the company, thus not incurring debt but rather exchanging ownership interests for capital.

Total Earnings

The sum of all earnings or income generated by an individual or organization within a specified period.