Which of the Following Methods Ignores the Fact That Some

question 50

Multiple Choice

Which of the following methods ignores the fact that some service departments provide service to other service departments?

• A) Direct method.
• B) Indirect method.
• C) Step-down method.
• D) Reciprocal method.
• E) Dual-cost allocation method.

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Definitions:

Break-even Point

The level of sales at which total revenues equal total costs, resulting in no profit or loss.

Net Loss

The amount by which total expenses exceed total revenues in a given period, indicating that a company spent more than it earned.

Margin Of Safety

The difference between actual or projected sales and the break-even point, indicating the amount by which sales can drop before the business incurs a loss.

Variable Expenses

Charges that escalate or decrease in sync with production quantities or sales levels, involving materials and workforce.