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Chapter 26
Cost Allocation and ActivityBased Costing
Study Guide SolutionsFillintheBlank Equations
1. Total budgeted plant wide allocation base
2. Department factory overhead rate
3. Ratio of allocation
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What is cost allocation and activity-based?
Cost allocation is the process of identifying, aggregating, and assigning costs to various activities or departments. Activity-based costing is a method of costing that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.
Who is required to file cost allocation and activity-based?
Organizations that want to accurately determine the cost of their products or services, improve decision-making, and understand the profitability of various activities are required to file cost allocation and activity-based.
How to fill out cost allocation and activity-based?
To fill out cost allocation and activity-based, organizations need to identify all activities within the organization, trace the costs to those activities, and allocate the costs based on the actual consumption of each activity by the products or services.
What is the purpose of cost allocation and activity-based?
The purpose of cost allocation and activity-based is to provide a more accurate understanding of the cost of products or services, improve decision-making, and allocate resources more effectively.
What information must be reported on cost allocation and activity-based?
Organizations must report all activities within the organization, the costs associated with each activity, and how those costs are allocated to products or services.
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