The MOST likely reason for allocating all corporate costs to divisions include t

Question

The MOST likely reason for allocating all corporate costs to divisions include that (Points : 3) divisions receive benefits from all corporate costs. division managers make decisions that ultimately control corporate costs. the hierarchy of costs promotes cost management. it is best to use multiple cost objects. 4. (TCO 9) Identifying homogeneous cost pools (Points : 3) requires judgment and should be reevaluated on a regular basis. should include the input of management. should include a cost-benefit analysis. All of the above 5. (TCO 9) The Hassan Corporation has an electric mixer division and an electric lamp division. Of a $20,000,000 bond issuance, the electric mixer division used $14,000,000 and the electric lamp division used $6,000,000 for expansion. Interest costs on the bond totaled $1,500,000 for the year. What amount of interest costs should be allocated to the electric lamp division? (Points : 3) $450,000 $6,000,000 $4,200,000 $1,050,000 6. (TCO 10) The stage of the capital budgeting process in which a firm obtains funding for the project is the (Points : 3) obtain-information stage. implement the decision, evaluate performance, and learn stage. make-decisions-by-choosing-among-alternatives stage. make-predictions stage

Explanation / Answer

The MOST likely reason for allocating all corporate costs to divisions include that a. division managers make decisions that ultimately control corporate costs. b. divisions receive benefits from all corporate costs. c. the hierarchy of costs promotes cost management . d. it is best to use multiple cost objects. Answer: b ==================================================================================== . Identifying homogeneous cost pools a. requires judgment and should be reevaluated on a regular basis. b. should include the input of management. c. should include a cost-benefit analysis. d. should include all of the above. Answer: d ====================================================================== 67. The Hassan Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $20,000,000 bond issuance, the Electric Mixer Division utilized $14,000,000 and the Electric Lamp Division utilized $6,000,000 for expansion. Interest costs on the bond totaled $1,500,000 for the year. 65. What amount of interest costs should be allocated to the Electric Mixer Division? a. $450,000 b. $1,050,000 c. $4,200,000 d. $14,000,000 Answer: b Difficulty: 2 $14,000,000/ $20,000,000 x $1,500,000= $1,050,000 ====================================================== 48) The stage of the capital budgeting process in which a firm obtains funding for the project is the: A) make decisions by choosing among alternatives stage. B) make predictions stage . C) obtain information stage. D) implement the decision, evaluate performance, and learn stage. Answer: D ===========================================================================================

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