Asked by Janani Balan on Jun 08, 2024
Verified
Consider the following statements about support department costs.
i. In order to assign all manufacturing costs to products, support department costs must be allocated to production departments.
ii. Support department costs are period costs rather than product costs because the support departments are not directly involved in production.
iii. Support departments are not considered crucial to the production process.
Which statement/s is/are correct?
A) i, ii and iii
B) i and iii
C) iii
D) i
Support Department Costs
Expenses associated with departments that do not directly produce goods or services but support those who do, like maintenance or administration.
Manufacturing Costs
Expenses directly tied to the process of producing finished goods, including raw materials, labor, and overhead costs.
Period Costs
Costs that are not directly tied to the production process and are expensed within the period they are incurred, such as selling, general, and administrative expenses.
- Grasp the criticality and operational procedures of cost allocation within accounting and managerial environments.
Verified Answer
Learning Objectives
- Grasp the criticality and operational procedures of cost allocation within accounting and managerial environments.
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