Common Fixed Costs That Are Allocated Between Departments Are Generally

question 73

Multiple Choice

Common fixed costs that are allocated between departments are generally

• A) direct fixed costs of the department.
• B) relevant to the decision of whether to drop the department.
• C) direct fixed costs of other departments.
• D) irrelevant to the decision of whether to drop the department.

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Definitions:

Equivalent Units

A method used in process costing that converts partially completed goods into a number of completed units of output.

Assembly Department

An area in a manufacturing plant where parts are put together to create finished goods.

Conversion Costs

These are the costs required to convert raw materials into finished products, comprising labor and overhead expenses.

Materials Costs

Expenses incurred for materials that are directly associated with manufacturing a product.