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3 years ago

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

Business

1 answer:

Whitepunk [10]3 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.

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Crown Company established a petty cash fund of $600 for incidental expenditures on January 2, 2019. At the end of the month, the

FrozenT [24]

Answer:

1) Dr Petty Cash $600

Cr. Cash $600

2) Dr. Postage Expense $250.40

Dr. Office Supplies Expense $160.90

Dr. Miscellaneous expense $124.05

Dr. Cash over and short $8.3

Cr. Cash $543.65

8 0

3 years ago

When you use the direct organizational plan for a routine message, you present the details before the primary idea?

12345 [234]

The direct organizational plant for a routine message requires that you present the primary ideas first and then any supporting evidence. This plan emphasizes deduction, understanding the implications (details) of a central idea rather than presenting particulars first building toward the central idea of a message.

4 0

3 years ago

HCC, Inc., expects its dividends to grow at 25 percent per year for the next seven years before levelling off to a constant 3 pe

Minchanka [31]

Answer:

a. $43.21

Explanation:

Find dividend (D) per year;

D1 = D0(1+g)

D0= current dividend = 1.05

g= growth rate = 25% or 0.25 as a decimal

therefore;

D1 = 1.05(1.25) =1.3125

D2 = 1.3125 (1.25) = 1.6406

D3 = 1.6406(1.25) =2.0508

D4 = 2.0508 (1.25) = 2.5635

D5 = 2.5635(1.25) = 3.2044

D6 = 3.2044(1.25) =4.0055

D7 = 4.0055 (1.25) = 5.0069

Terminal dividend: D8 = 5.0069(1.03) = 5.1571

Next , find the present values of each dividend (at t=0) at 11% discount rate;

1.3125 / (1.11) = 1.1824

1.6406 / (1.11^2) = 1.3315

2.0508 / (1.11^3) = 1.4995

2.5635 / (1.11^4) = 1.6887

3.2044 / (1.11^5) = 1.9017

4.0055 / (1.11^6) = 2.1415

5.0069 / (1.11^7) = 2.4116

Price of growing perpetual at (t= 0) = $\frac{5.1571 /(0.11-0.03)}{(1.11)^{7} } = \frac{64.46375}{2.07616} = 31.0495$

Next, sum up all the Present values to get the current stock price;

=43.2064

Therefore, the current price = $43.21

5 0

3 years ago

Suppose all firms follow similar financing policies, face similar risks, have equal access to capital, and operate in competitiv

sleet_krkn [62]

The answer is false!

6 0

3 years ago

Read 2 more answers

Observe the Sales Budget and determine which primary responsibility the managerial accountant uses todetermine which quarter gen

pantera1 [17]

Answer:

"Directing" seems to be the right response.

Explanation:

Directing seems to be the major concern of the financial analyst to ascertain whether the significant proportion obtained that much sales figures for every unit cost of production throughout addition to changing the marketing campaign.
Strategy formulation, trying to organize, staff numbers would not have any significance if the management function doesn't take place.

Therefore the method above is the right one.

4 0

2 years ago