Holooly Plus Logo
Holooly Plus Logo

Question 9.CR.12: What is a control reason for first allocating costs to depar...

What is a control reason for first allocating costs to departments and then to products?

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.

By allocating costs first to departments, the manager becomes responsible for those costs and has incentives to reduce them.

Related Answered Questions

Question: 9.5

Ryan plc manufactures a control assembly for Ford Motor’s auto steering columns. Ryan uses a JIT production system ...

Verified Answer:

The activities are summarized as follows: Chan...
Question: 9.4

A bicycle manufacturer estimates that the company will use 3,000 direct labor hours (DLH). ...

Verified Answer:

The manufacture estimates the following overhead c...
Question: 9.2

The job-order cost sheet for a special product is as follows: ...

Verified Answer:

Cost flows: On 05/26:    €180 from Raw Materia...
Question: 9.1

A customer orders a special tool (Job 676) that requires five units of part 103 at a cost of £40/unit, four units of part 244 at a cost of £20/unit, ...

Verified Answer:

job number:676 Date started: 05/06 Date comple...
Question: 9.3

A tool manufacturer uses machine hours (MH) to allocate overhead costs. The company expects to use 1,000 machine hours during the month and overhead ...

Verified Answer:

a. Actual overhead costs $90,000 Applied ove...
Question: 9.5

An online book retailer allocates equal overhead to each book sold. At the beginning of the year, the retailer estimates that 1 million books will be sold and that overhead will be $2 million. ...

Verified Answer:

The application rate is $2,000,000/1,000,000 books...
Question: 9.OA.1

CAE and Job-Order Costing CAE is the global leader in the specialized markets of simulation, modeling technologies, and integrated training services. Its core markets are civil aviation, defense and security, and health care. Its civil aviation division and training network serves approximately ...

Verified Answer:

CAE uses a job-order costing system to support its...
Question: 9.OA.2

Activity-Based Costing in a Business School How much does it ‘cost’ to teach an undergraduate student for one year? Is it more expensive to teach Ph.D. students, MBAs, or undergraduates? Most universities do not have good answers to these questions, despite complex and detailed accounting systems ...

Verified Answer:

Factors that might contribute to the higher cost o...
Question: 9.CR.13

What is the primary purpose of process costing? ...

Verified Answer:

The primary purpose of process costing is to ident...
Question: 9.CR.14

How does the concept of equivalent units enable the calculation of the average cost per unit? ...

Verified Answer:

Equivalent unit calculation is used when partially...