1. What types of costs are allocated? What is a support department? What is a producing department? What types of costs are allocated? Why is cost allocation important for companies to consider?

2. What are the differences between single charging rate and multiple charging rates? What factors might a company consider when determining how to allocate support department costs to a producing department? Give some examples of a type of support department costs and why it might be reasonably allocated to a producing department or departments.

3. What are the three methods of allocation and what are the differences between them? Why might a company choose one method over another?

4. After allocation of overhead to a producing department, how are overhead costs tied to production?