When Allocating Service Department Costs to User Departments,fixed Costs Should

question 74

True/False

When allocating service department costs to user departments,fixed costs should be allocated using budgeted cost rates times the actual cost driver level.

Recognise the various types of organisational objectives and their significance.

Appreciate the strategic management process, including strategy formulation and strategic planning.

Understand the concepts of diversification, vertical and horizontal integration, and their roles in strategic management.

Recognise the impact of information technology and e-business strategies in contemporary organisational strategies.

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Definitions:

Perpetual Inventory System

A method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Periodic Inventory System

An inventory accounting system that updates inventory levels and cost of goods sold at the end of an accounting period, rather than after each sale or purchase.

FIFO

"First In, First Out," an inventory valuation method where goods first received are the first to be sold or used, assuming costs rise over time.