Each Cost Pool Is Distributed to Each Responsibility Centre In

question 80

Multiple Choice

Each cost pool is distributed to each responsibility centre in:

• A) proportion to that centre's relative amount of allocation base.
• B) proportion to that centre's relative amount of direct cost.
• C) proportion to that centre's relative amount of liabilities.
• D) proportion to that centre's relative amount of profit.

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Definitions:

Timberlands

Refers to land primarily used for the cultivation and harvesting of timber.

Depletion

An accounting approach used to allocate the cost of extracting natural resources, such as minerals, oil, and gas, over the period those resources are extracted and sold.

Coal Company

A business entity engaged in the extraction, processing, and selling of coal as an energy source or raw material.

Salvage Value

The anticipated remaining value of an asset once it has completed its functional lifespan, typically taken into account in computations of depreciation.