Support Department Costs Are Accounted for in Which One of the Following

question 1

Multiple Choice

Support department costs are accounted for in which one of the following ways?

• A)They are allocated directly to units of product.
• B)They are allocated to producing departments and then allocated to units of product.
• C)They are allocated to units of product and then allocated to the producing departments.
• D)They are expensed as incurred.

---

Definitions:

Interest Tax Shield

The savings in income tax that a company achieves through deducting its interest expense from its taxable income.

WACC

Weighted Average Cost of Capital, a calculation of a firm's cost of capital where each category of capital is proportionately weighted.

Capital Structure

The particular combination of debt and equity that a company uses to finance its overall operations and growth.