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ASAP Support department cost aliocaton Hooligan Adventure Supply produces and sells vaneus outdoor equipment. The Molding and Assembly production departments are supported by the persannel
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Support department cost aliocaton Hooligan Adventure Supply produces and sells vaneus outdoor equipment. The Molding and Assembly production departments are supported by the persannel and Maintenance departments. Pessonnel costs are allocated to the production departments based on the number of employees, and Maintenance costs are allocated based on number of service calls. Information about these departments is detaled in the following tabie: 1. Which of the following statements matches the sequential method of cost allocations? a. Support departments are ofien allocoted in order from lowest to the highest coat wath preference given to the departments that serve few support departments and have no accurate cost drivers. b. Support depertments are cften aliocated in order from highest to lowest cost with preference given to the departments that serve many suppart departments and have. accurate cost deivers: c. The secuential method only allocates costs to departments that have a high profit margin. d. Nane of the above. Which depsrtment should be allocated first and identify the reasoni. Reason: a. It has the lowest departmental cont whth ne accurate cost driver b. It has the highest departmental cont wish no accurate cost driver. c. It has the lowest departmental cost wath an accurate cost driver. a. It has the highest desartinental cost with an accurste cost driver 3. Which allecstion methed is usually the mest accurate? 8. Direst method. bu Rociprocal thethod. c. Sesuentusl method. a. Hone of the above. What is a potential dissdvantage of the recprocal method? 4. It is the most complex mothod of cost aliacabian. b. Both fixed and variable coith are alloceted based on the computed cost bare. It considens the support department cost as its owrt departinert cost. Ail the abevt Step by Step Solution
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