All categories

2 years ago

Which of the following statements is incorrect when allocating service department costs to operating departments?

Business

1 answer:

Whitepunk [10]2 years ago

6 0

Option C is incorrect when allocating service department costs to operating departments.

Explanation:

Typically, fixed costs are not assigned to working departments; however, they have to be absorbed by the service. This statement is incorrect in the service dept. Cost to Operating dept.

The reciprocal method assigns the cost of services to operating departments and other departments. The reciprocal costs are identified and the costs are assigned to each other and to services offered by each service department.

For example, if Service Department A requires certain services of Service Department B, the cost allocation system would not include these services. Since these services are not delegated to other departments, some auditors assume that the direct approach is not right.

You might be interested in

The first group marketers try to bring their new products to the attention to are potential __________.

nika2105 [10]

The first group marketers try to bring their new products to the attention to are potential innovators. The innovators are individuals or group of people who are willing to try new products and ideas. Innovators bring new ideas, new devices or new methods on the market that will meet user's requirements and needs.

6 0

2 years ago

The Petit Chef Co. has 7 percent coupon bonds on the market with 9 years left to maturity. The bonds make annual payments and ha

PilotLPTM [1.2K]

Answer:

The YTM is 6.45%

Explanation:

Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.

Face value = F = $1,000

Coupon payment = $1,000 x 7% = $70

Selling price = P = $1,038.50

Number of payment = n = 9 years

Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

Yield to maturity = [ $70 + ( $1,000 - $1,038.5 ) / 9 ] / [ (1,000 + $1,038.5 ) / 2 ]

Yield to maturity = [ $70 - $4.28 ] / $1,019.25 = $65.72 /$1,019.25 = 0.0645 = 6.45%

7 0

2 years ago

Can a person’s general attitude toward risk be applied to his/her approach to investing

seropon [69]

Yes it can be applied.
If an investor is pessimistic that a certain risk that they fear will occur, they avoid investing in the fields prone to the risk.
For example, if an investor is offered an opportunity in the oil and flammable fuels and the persons dreads fire, that person declines the offer no matter how viable it is.

7 0

2 years ago

Consider the economy of Arcadia. Its households spend 75% of increases in their income. There are no taxes and no foreign trade.

Varvara68 [4.7K]

Answer:

Consider the economy of Arcadia. Its households spend 75% of increases in their income. There are no taxes and no foreign trade. Its currency is the are. Potential output Is 600 billion arcs (Scenario: Fiscal Policy) Look at the scenario Fiscal Policy. If actual output Is 500 billion arcs, to restore the economy to potential output government should by 25 billion arcs.

increase taxes

Explanation:

8 0

3 years ago

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium pri

never [62]

Answer:

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to rise and the equilibrium quantity to stay the same.

Explanation:

Perfectly inelastic demand curve indicates the quantity demanded for the life-saving medicine remains the same or does not change in response to a change in price.

Since a part of the law of supply states that the lower the quantity supplied, the higher the price; a reduction in the supply of the life-saving medicine will increase its price.

The combining effect of the two above will lead to an increase in the equilibrium price while the equilibrium quantity will remain the same as it will not respond to the change in price.

The attached graph explains this more clearly. In the graph, the demand curve DD is used to represent the perfectly inelastic demand curve for the life-saving medicine. Therefore, the quantity remains at q no matter the changes, either increase or decrease, in price. Movement from the supply curve S1 to S2 indicates a reduction in supply of the life-saving medicine which causes an increase in the equilibrium price from Po to P1 while the equilibrium quantity stays at q.

This therefore shows that if the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to rise and the equilibrium quantity to stay the same.

8 0

2 years ago