Costing - Study Mode
[#726] In incremental cost allocation method, cost object user who is ranked third in ranking order is classified as
Correct Answer
(D) second incremental user
Explanation
Solution: In incremental cost allocation method, cost object user who is ranked third in ranking order is classified as second incremental user.
[#727] Cost of operating activity, facility or any cost object which usually shares by two or more than two users is classified as
Correct Answer
(B) common cost
Explanation
Solution: Cost of operating activity, facility or any cost object which usually shares by two or more than two users is classified as common cost. A common cost is a cost that is not attributable to a specific cost object, such as a product or process.
[#728] cost object user, who is ranked first in incremental cost allocation method is known as
Correct Answer
(B) primary user
Explanation
Solution: cost object user, who is ranked first in incremental cost allocation method is known as primary user. The term primary user describes someone who interacts with a system. The primary user is in direct contact with the system interface and thus is usually most affected by it.
[#729] Costs, which consist of interdepartmental cost allocations plus cost of support department are classified as
Correct Answer
(A) complete reciprocal costs
Explanation
Solution: Costs, which consist of interdepartmental cost allocations plus cost of support department are classified as complete reciprocal costs. The allocation of service department costs is incomplete if the method used for cost allocation ignores or does not give full recognition to interdepartmental services.
[#730] If total incurred cost in a production process are $30000 and number of output units are 5000 units, then units cost will be
Correct Answer
(C) $6
Explanation
Solution: Units cost = Total incurred cost in a production process ÷ Number of output units = $30000 ÷ 5000 = $6