Question Details

Corporate administrative costs allocated to a division cost 



1.	Identifying homogeneous cost pools 
	a.	requires judgment and should be reevaluated on a regular basis.
	b.	should include the input of management.
	c.	should include a cost-benefit analysis.
	d.	should include all of the above.

		
2.	To allocate corporate costs to divisions, the allocation base used should 
	a.	be an output unit-level base.
	b.	have the best cause-and-effect relationship with the costs.
	c.	combine administrative costs and human resource management costs.
	d.	allocate the full costs.

		

3.	Corporate administrative costs allocated to a division cost pool are MOST likely
	a.	output unit-level costs.
	b.	facility-sustaining costs.
	c.	product-sustaining costs.
	d.	batch-level costs.

		

4.	To manage setup costs, a corporation might focus on
	a.	the number of setup-hours.
	b.	the number of units included in each production run.
	c.	the batch-level costs incurred per setup-hour.
	d.	both (a) and (c).




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