Question 1 If an allocation base cannot be identified, apply the revenue acoount

Question

Question 1 If an allocation base cannot be identified, apply the revenue acoount as the allocation base even though the relationship may be an indirect one. For this, the revenue account is known as ODefault Base O First Base O Reallocation base O None of the above Question2 When a company considers dropping the losing profit center, what are the issues that should be considered? O Loss of a market O Trust of client O Loss of key resources O All of the Above Question 3 Which of the following statement is incorrect? O A company should strive to select the most accurate allocation base. O There can be more than one allocation base for a given general overhead account O The base selected for a specific account must be related to that account, and must have a numenic relationship with each profit center O The default base should always be used. Question 4 The purpose of the profit center analysis is to () O Determine the profit producing impact of each type of work Determine the type of work which needs attention from management O Establish different pricing policies for each profit center O All of the above

Explanation / Answer

Q1. Answer is Default base. Q2. Answer is All of the above. Q3. Answer is Default base should always be used. Q4. Answer is All of the above.

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