[Solved] All of the Following Objectives Are Reasons That Service Department

Terrell Corporation Terrell Corporation produces various products used in the construction industry.The Plumbing Division produces and sells 100,000 copper fittings each month.Relevant information for last month follows: Top-level managers are trying to determine how a transfer price can be set on a transfer of 10,000 of the copper fittings from the Plumbing Division to the Bathroom Products Division. Refer to Terrell Corporation.If the Plumbing Division is operated as an autonomous investment center and its capacity is 100,000 fittings per month,the per-unit transfer price is not likely to be below A)$0.75. B)$1.60. C)$2.10. D)$2.50.

A service department includes which of the following? A)yes no B)yes yes C)no yes D)no no

Indirect costs should be allocated for all of the following reasons except to A)motivate managers. B)determine the full cost of a product. C)motivate general administration. D)compare alternatives for decision making.

A service department provides specific functional tasks for other internal units.Which of the following activities would not be engaged in by a service department? A)purchasing B)warehousing C)distributing D)manufacturing

All of the following objectives are reasons to allocate service department costs to compute full cost except to A)provide information on cost recovery. B)abide by regulations that may require full costing in some instances. C)provide information on controllable costs. D)reflect production's "fair share" of costs.

Which of the following is a reason for allocating service department costs and thereby motivating management? A)provides for cost recovery B)provides relevant information in determining corporate-wide profits generated by alternative actions C)meets regulations in some pricing instances D)reflects usage of services on a fair and equitable basis

Service departments provide functional tasks for which of the following? A)no no B)yes no C)no yes D)yes yes

After service department costs have been allocated,what is the final step in determining full product cost? A)determine direct material cost B)determine overhead application rates for revenue-producing areas C)determine direct labor cost D)determine total service department costs

Which of the following is not an objective for computing full cost? A)to reflect production's "fair share" of costs B)to instill a consideration of support costs C)to reflect usage of services on a fair and equitable basis D)to provide for cost recovery

A rational and systematic allocation base for service department costs should reflect the cost accountant's consideration of all of the following except A)the ability of revenue-producing departments to bear the allocated costs. B)the benefits received by the revenue-producing department from the service department. C)a causal relationship between factors in the revenue-producing department and costs incurred in the service department. D)all of the above are considerations.