Question Details

Which purpose of cost allocation is used to decide on the selling price 



1.	All of the following illustrate purposes for allocating costs to cost objects EXCEPT
	a.	to provide information for economic decisions.
	b.	to motivate managers and employees.
	c.	to determine a selling price the market will bear.
	d.	to measure income and assets for reporting to external parties.

		

2.	The costs of all six value-chain functions should be included when determining
	a.	whether to add a new product line.
	b.	the selling price of a service.
	c.	whether to make or buy a component part from another manufacturer. 
	d.	all of the above.

		

3.	R&D costs are used for which purpose of cost allocation?
	a.	To provide information for economic decisions
	b.	To report to external parties when using generally accepted accounting principles
	c.	To calculate costs of a government contract
	d.	All of the above purposes



4.	Which purpose of cost allocation is used to encourage sales representatives to push high-margin products or services?
	a.	To provide information for economic decisions
	b.	To motivate managers and other employees
	c.	To justify costs or compute reimbursement
	d.	To measure income and assets for reporting to external parties



5.	Which purpose of cost allocation is used to decide on the selling price for a customized product or service?
	a.	To provide information for economic decisions
	b.	To motivate managers and other employees
	c.	To justify costs or compute reimbursement
	d.	To measure income and assets for reporting to external parties





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