Question 1: There are three general guidelines to use when allocating service department (support) costs. One of such guidelines deals with the cost behavior of support costs. Why do many companies allocate fixed support costs separately from variable support costs?
Question 2: The fundamental distinction between job-order costing and process costing is the breadth of the denominator. Describe.
Question 3: The marketing manager of a major consumer products company said, “The balance sheet is not of much use to me. It is so static. However the income statement is a primary tool for managing my dynamic business.” Why would a marketing manager find out the income statement more helpful than the balance sheet?