Consider the following 3 hypothetical organizations. Organisation X has a total of 4 departments: two support departments and two operating departmentsOrganisation Y has a total of 4 departments: two support departments and two operating departmentsOrganisation Z has a total of 3 departments: two support departments and one operating department.There is a greater level interdependence between the support departments in Organisation X compared to Organisation Y. Based on the information above and assuming that the three organizations are otherwise similar, which of the following statements is likely to be true:1. The accurate allocation of support department costs to operating department(s) is less challenging for Organisation Z compared to Organisation X and Organisation Y.2. Organisation X is less likely to use the reciprocal method compared to Organisation Y3. Organisation X is less likely to use the direct method compared to Organisation YGroup of answer choicesStatement 1 onlyStatement 2 onlyStatement 3 onlyStatement 1 and 2 onlyStatement 1 and 3 only

Which of the following statements about Doggles Inc.'s allocation of support department costs is likely to be true?1. The support department costs that is allocated to Toys would subsequently be allocated to the units of output produced by Toys.2. The total amount of support department costs that will be allocated to both operating departments is $1,000,000.3. The accuracy of the support department cost allocation to the operating departments will depend solely on the choice between the different support department cost allocation methods (i.e., reciprocal vs step-down vs direct).   Group of answer choicesStatement 1 onlyStatement 2 onlyStatement 3 onlyStatement 1 and 2 onlyStatement 2 and 3 only

Multiple Choice QuestionA departmental contribution to overhead report is based on:Multiple choice question.uncontrollable costscontrollable costsservice department allocations

Which service department is most likely to use square feet of floor space occupied as the allocation base to assign its costs to operating departments?Multiple choice question.PersonnelMaintenanceAdvertisingPayroll

Which of the following statements about cost allocation is incorrect? a. Step-down method does not fully recognise the mutual dependenciesbetween support departments B.To ensure fairness, the same cost driver should be used to allocate costsfor all indirect cost pools. c. A cost may be considered an indirect cost even if it has a one-on-onerelation to the cost object, because the benefit of tracing this cost is toosmall. D. A cost can be direct or indirect cost depending on the cost object ofinterest. E. A training program offered by the human resource department can be a cost object.

1) When budgeted cost-allocations rates are used:A) variations in actual usage by one division affect the costs allocated to other divisionsB) the manager of the supplier division bears the risk of unfavorable cost variancesC) user divisions pay for costs that exceed budgeted amountsD) user divisions pay for inefficiencies of the supplier departmen