The Cost-Allocation Method That Allocates Each Support-Department's Costs to Operating

question 55

Multiple Choice

The cost-allocation method that allocates each support-department's costs to operating departments only is the ________.

• A) direct method
• B) single-rate cost allocation method
• C) step-down method
• D) reciprocal method

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Definitions:

Malpractice Insurance

A type of professional liability insurance that provides coverage to healthcare professionals for claims arising from allegations of medical errors or negligence.

Existing Risk

Refers to the current risks involved in a situation or transaction, especially those that have already been identified or assessed.

Valid Contract

A legally binding agreement that meets all required elements, including offer, acceptance, consideration, and mutual consent.

Losses

The negative financial impact resulting from the difference between costs and revenues, often attributed to business operations, investments, or unforeseen events.