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2) The dual-rate cost-allocation method classifies costs in each cost pool into a:A) budgeted-cost pool and an actual-cost poolB) variable-cost pool and a fixed-cost poolC) used-capacity-cost pool and a practical-capacity-cost poolD) direct-cost pool and a reciprocal-cost pool

Question

  1. The dual-rate cost-allocation method classifies costs in each cost pool into a:A) budgeted-cost pool and an actual-cost poolB) variable-cost pool and a fixed-cost poolC) used-capacity-cost pool and a practical-capacity-cost poolD) direct-cost pool and a reciprocal-cost pool
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Solution

The dual-rate cost-allocation method classifies costs in each cost pool into a variable-cost pool and a fixed-cost pool. So, the correct answer is B) variable-cost pool and a fixed-cost pool.

Here's a step-by-step explanation:

  1. In the dual-rate cost-allocation method, costs are divided into two categories: variable costs and fixed costs.

  2. Variable costs are those that change in direct proportion to the level of production or service activity. For example, the cost of raw materials used in production is a variable cost because it increases as more units are produced.

  3. Fixed costs, on the other hand, do not change with the level of production or service activity. For example, the cost of renting a factory or office space is a fixed cost because it remains the same regardless of how many units are produced.

  4. Therefore, in each cost pool (which is a grouping of individual costs), the dual-rate cost-allocation method separates costs into a variable-cost pool and a fixed-cost pool. This allows for more accurate cost allocation and better decision making.

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Similar Questions

1) The method that allocates costs in each cost pool using the same rate per unit is known as the:A) incremental cost-allocation methodB) reciprocal cost-allocation methodC) single-rate cost allocation methodD) dual-rate cost-allocation method

Fill in the Blank QuestionFill in the blank question.A single cost pool is used to allocate overhead costs to products for all departments using the allocation method.

6) Benefits of the dual-rate method include:A) variable costs that are transformed into fixed costs for user decision makingB) the low cost of implementationC) avoidance of expensive analysis for categorizing costs as either fixed or variableD) information that leads to outsourcing decisions that benefit the organization as a whole

Select all that applyIn the plantwide allocation method, Blank______.Multiple select question.the cost pool is the entire plantall costs are allocated to the plant and not the individual departmentsone overhead allocation rate, or set of rates, is used to allocate overhead for all departmentseach department across the plant has a unique overhead allocation rate

cost pool is used to allocate overhead c

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