Cope, Inc Has the Following Costs and Usage Data for Its

question 33

Multiple Choice

Cope, Inc. has the following costs and usage data for its support departments: Percent of Support Services Provided to
Direct Support Departments Operating Departments
Costs A B C 1 2
Services Provided By:
A $50,000 ---- 20% 10% 40% 30%
B 60,000 20% ---- 20% 20% 40%
C 30,000 10% 10% ---- 50% 30%
If the step-down method is used, and the order of allocation is department B first, then A, and finally C, the amount of support department A costs allocated to operating department 2 will be:

• A)$15,000
• B)$23,250
• C)$24,000
• D)$18,600

Understand variable costing, including how changes in production level affect financial outcomes.

Apply cost-volume-profit analysis to make informed operational and strategic decisions.

Understand the significance of fixed costs, variable costs, and sales mix in determining the break-even point and target profit levels.

Interpret changes in selling price, costs, or volume can affect break-even points and ultimately profitability.

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Definitions:

Share Price

The current price at which a share of stock can be bought or sold.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and subsequently adjusted for the investor's share of the investee's profits or losses.

Revaluation

The process of adjusting the book value of an asset to reflect its current fair market value.

Journal Entries

Records of financial transactions in the accounting system of a business, ensuring all financial transactions are accounted for.