Holooly Plus Logo
Holooly Plus Logo

Question 8.CR.8: How can cost allocations influence the behavior of managers?

How can cost allocations influence the behavior of managers?

The blue check mark means that this solution has been answered and checked by an expert. This guarantees that the final answer is accurate.
Learn more on how we answer questions.

Cost allocations affect the performance measures of managers and discourage them from using the allocation base used to allocate the costs

Related Answered Questions

Question: 8.7

The Green Corporation makes two products: chemex and citrol. The corporation has two product lines, ...

Verified Answer:

Chemex Division Citrol Division Revenues Open ...
Question: 8.6

The application rate for Maintenance department costs is $20 per hour of service. ...

Verified Answer:

Department Hours Application Rate Allocated Costs ...
Question: 8.2

A landscaping firm has two types of clients: those that request a cost-plus 20 percent contract ...

Verified Answer:

The reported cost for the cost-plus designs under ...
Question: 8.5

Use the data in Numerical Example 8.3. Suppose that one department decides not to use the motor pool because of alternative transportation opportunities ...

Verified Answer:

The new application rate is as follows: $200,000+(...
Question: 8.4

 Use the data in Numerical Example 8.3, except assume that the motor pool expects company vehicles to be driven a total of 1 million kilometers. ...

Verified Answer:

The application rate is total expected costs in th...
Question: 8.3

A motor pool allocates costs to other departments of the same organization based on the number of kilometers driven in company vehicles. ...

Verified Answer:

The application rate is total expected costs in th...
Question: 8.1

A sports equipment manufacturer makes two types of balls: soccer balls and footballs. There is no beginning inventory, and during the year the manufacturer makes 20,000 soccer balls and 40,000 footballs. Indirect manufacturing costs during the year are $100,000. ...

Verified Answer:

10,000/40,000 or 25 percent of the footballs are n...
Question: 8.OA.1

Strategy, ‘Pricing,’ and Costing in Universities Universities around the globe increasingly focus their strategic efforts on national and international recognition for their research and teaching. Research and teaching excellence are major factors in attracting highly qualified faculty ...

Verified Answer:

Queen’s University uses cost allocation primarily ...
Question: 8.CR.10

How are cost objects chosen? ...

Verified Answer:

Cost objects are chosen depending on the type of d...
Question: 8.CR.11

What is a cost pool? ...

Verified Answer:

A cost pool is an aggregation of costs related to ...