1. Why is the dual rate charging method better than the single rate method? In what circumstances would it not matter whether dual or single rates were used?
2. Please provide some possible reasons to allocate support department costs
3. Explain how the three methods of departmental cost allocation differ. Which method is the most preferred and why?
4. Consider a company with two operating departments and one support department. The support department distributes its costs to the operating departments on the basis of the number of employees in each department. If the costs in the support department are fixed, what effect would the addition of employees in one department have on the costs allocated to the other department?