Using the Direct Method of Allocating Service Department Costs,the Costs

question 4

Multiple Choice

Using the direct method of allocating service department costs,the costs are allocated to:

• A) operating departments only.
• B) service departments only.
• C) both operating departments and service departments.
• D) neither operating departments nor service departments.

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Definitions:

Short-run Production Function

A mathematical representation of the relationship between a firm's output and the amounts of inputs used, assuming some inputs are fixed.

Variable Factor

An input in the production process that can be adjusted in the short term to change the output level, such as labor or raw materials.

Fixed Factors

Elements of production that cannot be easily increased or decreased in the short term, such as land, buildings, or capital equipment.

Weak Axiom

A principle or condition in economics that provides a minimal criterion for consumer choice consistency under certain assumptions.