information content of interdepartmental eost allocations Return to Chapter 17, problem 9, where departmental variances were ealeulated.

You were asked in part [b] to decide how, orwhether, to alloeate the manufacturing service group costs to the fabrication and assembly departments. Allocate the manufacturing service group variable costs to the fabrication and assembly departments (i) using standard priee and standard quantities; (ii) using standard priee and aetual quantities; and (iii) using aetual priee and aetual quantities. For the latter ease, assume all of the priee varianee is associated with the "variabIe" eost.

For eaeh alloeation method, identify the manufaeturing service group priee and quantity varianees that now appear in the fabrieation and assembly department evaluations. Carefully discuss the appropriateness of holding the fabrieation and assembly department managers responsibIe for these additional varianees; link your discussion to the notion of conditionaI controIlability.

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