Exam 3: A Costing Framework and Cost Allocation

The costs of the computer services department of an organisation are allocated to other departments at $81 per number of computers in the department. If Department X has 38 computers and Department Y has 89 the computer services costs allocated to Department Y will be $3382.

A cost driver provides a measure of activity that explains the cost object's use of a direct cost.

Which of these is an example of an indirect cost if Department T is the cost object?

Trucker industries provides the following information about departmental consumption of allocation bases for its 3 support and 2 operating departments. For the direct method, what proportion of the Personnel's costs will be allocated to the Machining Department?

Indirect costs can also be referred to as overhead costs.