When Using the Direct Allocation Method, a Cost Accountant Would

question 48

Multiple Choice

When using the direct allocation method, a cost accountant would ________.

• A) not allocate support department costs to other support departments
• B) use information about reciprocal services provided among support departments and therefore could generate inaccurate estimates of the cost of operating departments
• C) allocate complete reciprocated costs
• D) allocate support department costs to other support departments

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Definitions:

High-duration

Describes bonds or other fixed-income securities that have high sensitivity to changes in interest rates, usually because they have a long time until maturity.

Low-duration

Refers to investments that have a short time until maturity, typically associated with lower interest rate risk.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates, expressed in years.

Today's Dollars

An amount of money adjusted for inflation to reflect current purchasing power, often used to compare money values at different times.