Which of the Following Statements Is FALSE

question 108

Multiple Choice

Which of the following statements is FALSE?

• A) Under the step-down method, after allocating Service Department 1 costs to Service Department 2, we do not allocate any costs back to Service Department 1.
• B) Under the step-down method, we ignore services provided by a service department to itself.
• C) The total amount of service department costs allocated to user departments is the same for the step-down and direct methods.
• D) Under the step-down method, the first service department to allocate costs to the user departments is the one that provides the most service to the producing departments.

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Definitions:

Long Run

A period in economics sufficient for all markets to adjust, including production levels, prices, and resource allocation, often contrasted with the short run where some factors are fixed.

Efficient Output

The level of production at which a firm or economy is producing at minimum average total cost, optimizing resource use.

Demand Curve

a graph showing the relationship between the price of a good and the quantity of that good which consumers are willing to purchase at various prices.

MR Curve

In economics, the Marginal Revenue curve shows how the revenue generated from selling one additional unit of a good or service changes with quantity sold.