In the Multiplier Model All Expenditures Are Classified as One

question 11

Essay

In the multiplier model all expenditures are classified as one of two types.Explain and give an example of each type of expenditure.

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Definitions:

Sequential Method

A technique used in allocating costs among departments or processes in a sequential manner, considering interdepartmental services.

Support Department Allocations

The distribution of costs from support departments to producing departments based on the level of service used.

Cost Driver

A factor that causes the costs of an activity to increase or decrease.

Sequential Method

A cost allocation technique that processes cost pools in a pre-determined order, allocating costs to one cost object before moving on to the next.