Which of the Following Statements Concerning the Allocation of Indirect

question 12

Multiple Choice

Which of the following statements concerning the allocation of indirect expenses to departments is true?

• A) A departmental profit calculation should exclude expenses that the departmental manager has no control over.
• B) When preparing departmental profit reports it is best to assume that the departments are independent businesses.
• C) Different accountants will normally chose similar bases to allocate overhead costs to departments.
• D) Accountants have developed methods that have completely removed the subjectivity in allocating indirect costs to departments.

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