When the Step-Down Method Is Used to Allocate Support Department

question 33

Multiple Choice

When the step-down method is used to allocate support department costs, a common way to select the first support department in the sequence is to choose the support department which:

• A) obtains the highest yield.
• B) serves no other support department.
• C) serves the greatest number of other support departments.
• D) obtains the highest yield AND serves no other support department.

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Definitions:

Management Inventories

Tools or systems used to record and track managerial resources, skills, and potentials within an organization.

Nominal Group Technique

A structured form of brainstorming that allows individuals to participate in idea generation and decision-making processes anonymously.

External Supply

Resources or materials provided by third-party companies or suppliers outside the organization.

Labour Supply

The total hours that workers are willing and able to work at a given level of compensation, in a specific labor market.