Question : Objective 15.4 1) A cost of operating a facility, department, activity : 1211847

 

Objective 15.4

 

1) A cost of operating a facility, department, activity area, or like cost object that is shared by two or more users is called a ________.

A) combined cost

B) distinct cost

C) fixed cost

D) common cost

2) Under the stand-alone method of allocating common costs ________.

A) the individual users of a cost object are ranked in the order of users least responsible for the common cost and then uses this ranking to allocate cost among those users

B) disputes can arise over who is the primary user

C) each party bears a proportionate share of the total costs in relation to their individual stand-alone costs

D) the individual users of a cost object are ranked in the order of users most responsible for the common cost and then uses this ranking to allocate cost among those users

 

3) Under the incremental method of allocating common costs ________.

A) the parties are interested in being viewed as primary users

B) each party bears a proportionate share of the total costs in relation to their individual stand-alone costs

C) the first-incremental user bears a higher proportion of the cost in comparison with the primary user

D) the primary user bears the maximum of the total cost

 

Answer the following questions using the information below:

 

Emrald Corp currently uses a manufacturing facility costing $500,000 per year; 90% of the facility’s capacity is currently being used. A start-up business has proposed a plan that would utilize the other 10% of the facility and increase the overall costs of maintaining the space by 5%.

 

4) If the stand-alone method were used, what amount of cost would be allocated to the start-up business?

A) $48,000

B) $50,000

C) $50,500

D) $52,500

5) If the incremental method were used, what amount of cost would be allocated to the start-up business?

A) $40,000

B) $50,000

C) $46,000

D) $42,000

 

Answer the following questions using the information below:

 

Harbor Corp currently leases a corporate suite in an office building for a cost of $280,000 a year. Only 80% of the corporate suite is currently being used. A start-up business has proposed a plan that would use the other 20% of the suite and increase the overall costs of maintaining the space by $20,000.

 

6) If the stand-alone method were used, what amount of cost would be allocated to the start-up business?

A) $70,000

B) $66,000

C) $60,000

D) $74,000

 

7) If the incremental method were used, what amount of cost would be allocated to the start-up business?

A) $20,000

B) $300,000

C) $60,000

D) $75,000

 

8) The stand-alone method of allocating determines the weights for cost allocation by considering each user of the cost as a separate entity.

9) Under the incremental method, the primary user usually receives the highest allocation of the common costs.

 

10) If the incremental users are newly formed companies or subunits, the incremental method may decrease their chances for short-run survival by assigning them a high allocation of the common costs.

 

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more