mid-term examination management accounting acct 361
Fall 2014
MID-TERM EXAMINATION STUDENT NAME
STUDENT NUMBER
MANAGEMENT ACCOUNTING ACCT 361 VERSION 1
PROFESSOR:
KEVIN PARENT
DATE: TIME:
October 24, 2014 9-11am
INSTRUCTIONS: TRANSLATION dictionaries ARE PERMITTED. Calculators ARE PERMITTED in this examination. ANSWER BOOKLET to be used for answers. This examination has a total of 5 pages including this cover page. Please ensure that you have a complete examination paper before starting.
THIS EXAMINATION IS PRINTED ON BOTH SIDES OF THE PAGE THIS EXAMINATION PAPER MUST BE RETURNED
1. Bear Manufacturing begins operations on October 1. Information from job cost sheets shows the following: Manufacturing Costs Assigned (non-cumulative) Job October November December A $ 11,500 B $ 5,200 $ 8,300 C $ 3,000 $ 5,800 $ 4,200 D $ 7,100 $ 8,000 E $ 3,400 Job A was completed in October. Job B was completed in November. Job C was completed in December. Each job was sold in the month following completion. Required (12) (15 min.) Determine the following amounts: 1. 2. 3. 4. 5. 6.
Work in process inventory, October 31 Finished goods inventory, October 31 Work in process inventory, November 30 Finished goods inventory, November 30 Work in process inventory, December 31 Finished goods inventory, December 31
$_______________ $_______________ $_______________ $_______________ $_______________ $_______________
2. Required (5) (5 min.) Classify the following manufacturing costs and expenses by using the following code letters: A. B. C. D.
Direct materials cost Direct labour cost Manufacturing overhead cost Period cost
Abel Manufacturing Company incurs the following costs and expenses in making furniture: ____ 1. ____ 2. ____ 3. ____ 4. ____ 5. ____ 6. ____ 7. ____ 8. ____ 9. ____ 10.
Insurance on factory building Oak and pine wood used in desks and chairs Lubricants, rosin, and polishing compounds used in manufacturing Advertising in trade magazines Rent on leased factory machinery Wages of assembly line workers Salesperson's commissions Depreciation on delivery equipment Depreciation on factory machinery Wages of factory maintenance workers
3. Farrell Company manufactures a product that sells for $ 50 per unit. Farrell incurs a variable cost per unit of $ 30 and $ 3,400,000 in total fixed costs to produce this product. They are currently selling 200,000 units. Required (18) (20 min.) Complete each of the following requirements, presenting labelled supporting computations. (a)
Calculate and label the contribution margin per unit and contribution margin ratio.
(b)
Using the contribution margin per unit, calculate the break-even point in units.
(c)
Using the contribution margin ratio, calculate the break-even point in dollars.
(d)
Calculate the margin of safety and margin of safety ratio.
(e)
Calculate the number of units that must be sold in order to generate net income of $400,000 using the contribution margin per unit.
(f)
Should Farrell give a commission to its salespeople based on 10% of sales if it will decrease fixed costs by $400,000 and increase sales volume 10%? Support your answer with labelled computations.
4. Required (8) (10 min.) Write a linear cost function equation for each of the following conditions. Use y for estimated costs and X for activity of the cost driver. (a)
Direct manufacturing labour is $ 10 per hour.
(b)
Direct materials cost $ 9.20 per cubic yard.
(c)
Utilities have a minimum charge of $ 1,000, plus a charge of $ 0.05 per kilowatt-hour.
(d)
Machine operating costs include $ 200,000 of machine depreciation per year, plus $ 75 of utility costs for each day the machinery is in operation.
5. Bright Window Company designs and builds custom windows for luxury homes. Most of the windows are custom made but occasionally the company does mass production on order. Its budgeted manufacturing overhead costs for the year 2012 are as follows: Overhead Cost Pools Purchasing Production (cutting, milling, finishing) Setting up machines Inspecting Utilities Total budget overhead costs
Amount 180,000 400,000 135,000 160,000 300,000 $ 1,175,000 $
For the last three years, the company has been charging overhead to products on the basis of machine hours. For the year 2012, 100,000 machine hours are budgeted. Susan Craft, owner-manager of Bright Window, recently directed her accountant to implement the activity-based costing system she has repeatedly proposed. At Susan's request, the accountant and production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools.
Overhead Cost Pools Purchasing Production (cutting, milling, finishing) Setting up machines Inspecting Utilities
Activity Cost Drivers Number of orders Direct labour hours Number of setups Number of inspections Square metres occupied
Total Drivers 500 80,000 1,000 5,000 75,000
During this month, the company received an order for 50 window sets from a housing development contractor. The accountant prepares cost estimates for producing components for 50 window sets so Susan can submit a contract price per window set to the contractor. The following data for the production of 50 window sets is accumulated: Direct materials Direct labour Machine hours Direct labour hours Number of purchase orders Number of machine setups Number of inspections Number of square metres occupied
$ 120,000 $ 135,000 12,000 10,000 50 80 380 7,000
Required (17) (20 min.) (a) Calculate the predetermined overhead rate using traditional costing with machine hours as the basis. (3) (b) Calculate the manufacturing cost per window set under traditional costing. (6) (c) Calculate the manufacturing cost per window set under the proposed activity-based costing. (8)
6. KevPar Inc. manufactures and sells sea kayaks. KevPar’s manufacturing operations are organized into one quality control (QC) department and three production departments – fiberglass (F), kevlar (K) and plastic (P). Each production department manufactures sea kayaks in different material. The QC department provides verifications of the sea kayaks for each of the three production departments. Each production department is treated as a cost centre. The respective managers are awarded year-end performance bonuses on the basis of meeting budgeted costs or achieving cost savings. All costs incurred by the QC department are allocated to the production departments using the number of quality control verifications as an allocation base. When planning the 2013 fiscal year, KevPar’s senior management budgeted for total QC department costs of $ 100,000 based on 100 verifications. The request for verifications by F, K and P were expected to be 30, 50 and 20. Actual costs incurred by the QC department during 2013 were $ 126,500 and the actual QC jobs requested by F, K and P were 50, 50 and 15 resulting in the total costs allocations to F, K and P of $ 55,000, $ 55,000 and $ 16,500 respectively. Because of the increased demand of verification services, the QC department incurred overtime expenses. During performance evaluations at year end, the manager of K expressed serious misgivings about the costs allocated to his division: “I don’t think our cost allocation system is fair. Why should I be held accountable for someone else’s efficiency or someone else’s level of consumption?” Required (40) (50 min.) Prepare a report to KevPar’s senior management addressing the concerns of K’s manager – specifically, consider whether KevPar’s cost allocation system is fair. As well you could suggest alternatives that may improve how the costs are allocated and the way the performances within KevPar are evaluated.
Solutions 1. 1. 2. 3. 4. 5. 6.
$8,200 $11,500. $15,900 $13,500 $18,500 $13,000
2. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
C A C D C B D D C C
($5,200 + $3,000). ($3,000 + $5,800 + $7,100). ($5,200 + $8,300). ($7,100 + $8,000 + $3,400). ($3,000 + $5,800 + $4,200).
3. (a)
Unit selling price Unit variable costs Contribution margin per unit
(b)
$3,400,000 ÷ $20 = 170,000 units
(c)
$3,400,000 ÷ 40% = $8,500,000
(d)
$10,000,000 – $8,500,000 = $1,500,000 margin of safety $1,500,000 ÷ $10,000,000 = 15% margin of safety ratio
(e)
($3,400,000 + $400,000) ÷ $20 = 190,000 units
(f)
Current expected income Sales (200,000 × $50) $10,000,000 V.E. (200,000 × $30) 6,000,000 C.M. 4,000,000 F.E. 3,400,000 N.I. $ 600,000
Therefore, No. 4. (a) (b) (c) (d)
y = $10X y = $9.20X y = $1,000 + $0.05X y = $200,000 + $75X
$50 (30) $20
Contribution margin per unit Unit selling price
New expected income Sales (220,000 × $50) V.E. [(220,000 × $30) + ($11,000,000 × 10%)] C.M. F.E. N.I.
$20 ÷ $50 40%
$11,000,000 7,700,000 3,300,000 3,000,000 $ 300,000
5. (a)
(b)
Predetermined overhead rate using machine hours: $1,175,000 ÷ 100,000 hours = $11.75 per machine hour Manufacturing cost per window set under traditional costing: Direct materials $120,000 Direct labour 135,000 Overhead (12,000 × $11.75) 141,000 Total cost of 50 window sets $396,000 Cost per window set ($396,000 ÷ 50)
(c)
$7,920
Manufacturing cost per window set under activity-based costing: Computation of Activity-Based Overhead Rate
Activity Cost Pool
Estimated Overhead Purchasing $ 180,000 Production 400,000 Setting up machines 135,000 Inspecting 160,000 Utilities 300,000 $1,175,000
Total Estimated Drivers 500 orders 80,000 D/L hrs. 1,000 setups 5,000 inspections 75,000 sq. metres
Activity-Based Overhead Rate $360 per order $5 per D/L hr. $135 per setup $32 per inspection $4 per sq. metre
Assignment of Overhead to Order of 50 Window Sets
Activity Cost Pool Purchasing Production Setting up machines Inspecting Utilities
Expected Use of Driver 50 orders 10,000 D/L hrs. 80 setups 380 inspections 7,000 sq. ft.
Activity-Based Overhead Rate $360 $5 $135 $32 $4
Total manufacturing cost per window set under ABC: Direct materials $120,000 Direct labour 135,000 Overhead 118,960 Total cost of 50 window sets $373,960 Total cost per window set:
$7,479
Cost Assigned $ 18,000 50,000 10,800 12,160 28,000 $118,960
6. Objective/Criteria
Adresses the organization's cost allocation fairness.
Performance Indicators Did not Somewhat address Below (0 points) (1 point)
Below
Meets
(2 points)
(3 points)
Somewhat Above (4 points)
Exceeds (5 points)
Adresses how costs are being allocated presently.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Identifies the cause for the greivance of part K.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Suggests sensible alternatives of how costs are presently allocated.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Suggests alternative cost allocation of QC costs.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Provide a well reasoned conclusion consistent with analysis.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Exercices a high level of professional judgement.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Communicates information in a timely, clear and concise manner.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Fairness: From an individual perspective, F, K or P may perceive the cost allocation system to be “fair” if they are being or not being allocated cost for which they are responsible and “unfair” if they are being allocated costs for which they are not responsible. To achieve “fairness” in performance evaluation from an overall perspective, F,K, P and QC must be evaluated and rewarded based on results they have achieved that are within their control. “Fairness” can also be analysed for the purposes of allocation of resources, organizational control and cost recovery.
Overtime costs and other incremental costs caused by demands exceeding budgeted numbers may be the extra costs in the QC department. The QC department may also be inefficient and thus allocated extra costs to F, K and P. QC offers services to all other departments and a deviation of budgeted costs is to be expected. Present cost allocation: Calculation of cost allocation method based on budget and actual. Budget
Actual
Difference
F
30
1000
30000
50
1100
55000
25000
K
50
1000
50000
50
1100
55000
5000
P
20 100
1000
20000 100000
15 115
1100
16500 126500
-3500 26500
K Grievance: K planned to use 50 QC checks and planned on being allocated $ 50,000. K used 50 QC checks but was allocated $ 55,000 which will influence the bonus to be received by each department related to equivalence or reduction of budget. K is being allocated the extra costs form other department’s requirement of extra QC checks on which it has no influence. Alternative to present cost allocations: Extra costs allocated only to departments that have requested superior numbers of QC checks. Normal
Extra
Total
Difference
F
50
1000
50000
20
11500
61500
11500
K
50
1000
50000
0
0
50000
0
P
15 115
1000
15000 115000
-5 15
0 11500
15000 126500
0 11500
Alternative to cost allocations: Different cost allocations such as using the number of direct hours per department, number of items actually verified per department, ABC, etc.
MID-TERM EXAMINATION STUDENT NAME
STUDENT NUMBER
MANAGEMENT ACCOUNTING ACCT 361 VERSION 1
PROFESSOR:
KEVIN PARENT
DATE: TIME:
October 24, 2014 9-11am
INSTRUCTIONS: TRANSLATION dictionaries ARE PERMITTED. Calculators ARE PERMITTED in this examination. ANSWER BOOKLET to be used for answers. This examination has a total of 5 pages including this cover page. Please ensure that you have a complete examination paper before starting.
THIS EXAMINATION IS PRINTED ON BOTH SIDES OF THE PAGE THIS EXAMINATION PAPER MUST BE RETURNED
1. Bear Manufacturing begins operations on October 1. Information from job cost sheets shows the following: Manufacturing Costs Assigned (non-cumulative) Job October November December A $ 11,500 B $ 5,200 $ 8,300 C $ 3,000 $ 5,800 $ 4,200 D $ 7,100 $ 8,000 E $ 3,400 Job A was completed in October. Job B was completed in November. Job C was completed in December. Each job was sold in the month following completion. Required (12) (15 min.) Determine the following amounts: 1. 2. 3. 4. 5. 6.
Work in process inventory, October 31 Finished goods inventory, October 31 Work in process inventory, November 30 Finished goods inventory, November 30 Work in process inventory, December 31 Finished goods inventory, December 31
$_______________ $_______________ $_______________ $_______________ $_______________ $_______________
2. Required (5) (5 min.) Classify the following manufacturing costs and expenses by using the following code letters: A. B. C. D.
Direct materials cost Direct labour cost Manufacturing overhead cost Period cost
Abel Manufacturing Company incurs the following costs and expenses in making furniture: ____ 1. ____ 2. ____ 3. ____ 4. ____ 5. ____ 6. ____ 7. ____ 8. ____ 9. ____ 10.
Insurance on factory building Oak and pine wood used in desks and chairs Lubricants, rosin, and polishing compounds used in manufacturing Advertising in trade magazines Rent on leased factory machinery Wages of assembly line workers Salesperson's commissions Depreciation on delivery equipment Depreciation on factory machinery Wages of factory maintenance workers
3. Farrell Company manufactures a product that sells for $ 50 per unit. Farrell incurs a variable cost per unit of $ 30 and $ 3,400,000 in total fixed costs to produce this product. They are currently selling 200,000 units. Required (18) (20 min.) Complete each of the following requirements, presenting labelled supporting computations. (a)
Calculate and label the contribution margin per unit and contribution margin ratio.
(b)
Using the contribution margin per unit, calculate the break-even point in units.
(c)
Using the contribution margin ratio, calculate the break-even point in dollars.
(d)
Calculate the margin of safety and margin of safety ratio.
(e)
Calculate the number of units that must be sold in order to generate net income of $400,000 using the contribution margin per unit.
(f)
Should Farrell give a commission to its salespeople based on 10% of sales if it will decrease fixed costs by $400,000 and increase sales volume 10%? Support your answer with labelled computations.
4. Required (8) (10 min.) Write a linear cost function equation for each of the following conditions. Use y for estimated costs and X for activity of the cost driver. (a)
Direct manufacturing labour is $ 10 per hour.
(b)
Direct materials cost $ 9.20 per cubic yard.
(c)
Utilities have a minimum charge of $ 1,000, plus a charge of $ 0.05 per kilowatt-hour.
(d)
Machine operating costs include $ 200,000 of machine depreciation per year, plus $ 75 of utility costs for each day the machinery is in operation.
5. Bright Window Company designs and builds custom windows for luxury homes. Most of the windows are custom made but occasionally the company does mass production on order. Its budgeted manufacturing overhead costs for the year 2012 are as follows: Overhead Cost Pools Purchasing Production (cutting, milling, finishing) Setting up machines Inspecting Utilities Total budget overhead costs
Amount 180,000 400,000 135,000 160,000 300,000 $ 1,175,000 $
For the last three years, the company has been charging overhead to products on the basis of machine hours. For the year 2012, 100,000 machine hours are budgeted. Susan Craft, owner-manager of Bright Window, recently directed her accountant to implement the activity-based costing system she has repeatedly proposed. At Susan's request, the accountant and production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools.
Overhead Cost Pools Purchasing Production (cutting, milling, finishing) Setting up machines Inspecting Utilities
Activity Cost Drivers Number of orders Direct labour hours Number of setups Number of inspections Square metres occupied
Total Drivers 500 80,000 1,000 5,000 75,000
During this month, the company received an order for 50 window sets from a housing development contractor. The accountant prepares cost estimates for producing components for 50 window sets so Susan can submit a contract price per window set to the contractor. The following data for the production of 50 window sets is accumulated: Direct materials Direct labour Machine hours Direct labour hours Number of purchase orders Number of machine setups Number of inspections Number of square metres occupied
$ 120,000 $ 135,000 12,000 10,000 50 80 380 7,000
Required (17) (20 min.) (a) Calculate the predetermined overhead rate using traditional costing with machine hours as the basis. (3) (b) Calculate the manufacturing cost per window set under traditional costing. (6) (c) Calculate the manufacturing cost per window set under the proposed activity-based costing. (8)
6. KevPar Inc. manufactures and sells sea kayaks. KevPar’s manufacturing operations are organized into one quality control (QC) department and three production departments – fiberglass (F), kevlar (K) and plastic (P). Each production department manufactures sea kayaks in different material. The QC department provides verifications of the sea kayaks for each of the three production departments. Each production department is treated as a cost centre. The respective managers are awarded year-end performance bonuses on the basis of meeting budgeted costs or achieving cost savings. All costs incurred by the QC department are allocated to the production departments using the number of quality control verifications as an allocation base. When planning the 2013 fiscal year, KevPar’s senior management budgeted for total QC department costs of $ 100,000 based on 100 verifications. The request for verifications by F, K and P were expected to be 30, 50 and 20. Actual costs incurred by the QC department during 2013 were $ 126,500 and the actual QC jobs requested by F, K and P were 50, 50 and 15 resulting in the total costs allocations to F, K and P of $ 55,000, $ 55,000 and $ 16,500 respectively. Because of the increased demand of verification services, the QC department incurred overtime expenses. During performance evaluations at year end, the manager of K expressed serious misgivings about the costs allocated to his division: “I don’t think our cost allocation system is fair. Why should I be held accountable for someone else’s efficiency or someone else’s level of consumption?” Required (40) (50 min.) Prepare a report to KevPar’s senior management addressing the concerns of K’s manager – specifically, consider whether KevPar’s cost allocation system is fair. As well you could suggest alternatives that may improve how the costs are allocated and the way the performances within KevPar are evaluated.
Solutions 1. 1. 2. 3. 4. 5. 6.
$8,200 $11,500. $15,900 $13,500 $18,500 $13,000
2. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
C A C D C B D D C C
($5,200 + $3,000). ($3,000 + $5,800 + $7,100). ($5,200 + $8,300). ($7,100 + $8,000 + $3,400). ($3,000 + $5,800 + $4,200).
3. (a)
Unit selling price Unit variable costs Contribution margin per unit
(b)
$3,400,000 ÷ $20 = 170,000 units
(c)
$3,400,000 ÷ 40% = $8,500,000
(d)
$10,000,000 – $8,500,000 = $1,500,000 margin of safety $1,500,000 ÷ $10,000,000 = 15% margin of safety ratio
(e)
($3,400,000 + $400,000) ÷ $20 = 190,000 units
(f)
Current expected income Sales (200,000 × $50) $10,000,000 V.E. (200,000 × $30) 6,000,000 C.M. 4,000,000 F.E. 3,400,000 N.I. $ 600,000
Therefore, No. 4. (a) (b) (c) (d)
y = $10X y = $9.20X y = $1,000 + $0.05X y = $200,000 + $75X
$50 (30) $20
Contribution margin per unit Unit selling price
New expected income Sales (220,000 × $50) V.E. [(220,000 × $30) + ($11,000,000 × 10%)] C.M. F.E. N.I.
$20 ÷ $50 40%
$11,000,000 7,700,000 3,300,000 3,000,000 $ 300,000
5. (a)
(b)
Predetermined overhead rate using machine hours: $1,175,000 ÷ 100,000 hours = $11.75 per machine hour Manufacturing cost per window set under traditional costing: Direct materials $120,000 Direct labour 135,000 Overhead (12,000 × $11.75) 141,000 Total cost of 50 window sets $396,000 Cost per window set ($396,000 ÷ 50)
(c)
$7,920
Manufacturing cost per window set under activity-based costing: Computation of Activity-Based Overhead Rate
Activity Cost Pool
Estimated Overhead Purchasing $ 180,000 Production 400,000 Setting up machines 135,000 Inspecting 160,000 Utilities 300,000 $1,175,000
Total Estimated Drivers 500 orders 80,000 D/L hrs. 1,000 setups 5,000 inspections 75,000 sq. metres
Activity-Based Overhead Rate $360 per order $5 per D/L hr. $135 per setup $32 per inspection $4 per sq. metre
Assignment of Overhead to Order of 50 Window Sets
Activity Cost Pool Purchasing Production Setting up machines Inspecting Utilities
Expected Use of Driver 50 orders 10,000 D/L hrs. 80 setups 380 inspections 7,000 sq. ft.
Activity-Based Overhead Rate $360 $5 $135 $32 $4
Total manufacturing cost per window set under ABC: Direct materials $120,000 Direct labour 135,000 Overhead 118,960 Total cost of 50 window sets $373,960 Total cost per window set:
$7,479
Cost Assigned $ 18,000 50,000 10,800 12,160 28,000 $118,960
6. Objective/Criteria
Adresses the organization's cost allocation fairness.
Performance Indicators Did not Somewhat address Below (0 points) (1 point)
Below
Meets
(2 points)
(3 points)
Somewhat Above (4 points)
Exceeds (5 points)
Adresses how costs are being allocated presently.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Identifies the cause for the greivance of part K.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Suggests sensible alternatives of how costs are presently allocated.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Suggests alternative cost allocation of QC costs.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Provide a well reasoned conclusion consistent with analysis.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Exercices a high level of professional judgement.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Communicates information in a timely, clear and concise manner.
(0 points)
(1 point)
(2 points)
(3 points)
(4 points)
(5 points)
Fairness: From an individual perspective, F, K or P may perceive the cost allocation system to be “fair” if they are being or not being allocated cost for which they are responsible and “unfair” if they are being allocated costs for which they are not responsible. To achieve “fairness” in performance evaluation from an overall perspective, F,K, P and QC must be evaluated and rewarded based on results they have achieved that are within their control. “Fairness” can also be analysed for the purposes of allocation of resources, organizational control and cost recovery.
Overtime costs and other incremental costs caused by demands exceeding budgeted numbers may be the extra costs in the QC department. The QC department may also be inefficient and thus allocated extra costs to F, K and P. QC offers services to all other departments and a deviation of budgeted costs is to be expected. Present cost allocation: Calculation of cost allocation method based on budget and actual. Budget
Actual
Difference
F
30
1000
30000
50
1100
55000
25000
K
50
1000
50000
50
1100
55000
5000
P
20 100
1000
20000 100000
15 115
1100
16500 126500
-3500 26500
K Grievance: K planned to use 50 QC checks and planned on being allocated $ 50,000. K used 50 QC checks but was allocated $ 55,000 which will influence the bonus to be received by each department related to equivalence or reduction of budget. K is being allocated the extra costs form other department’s requirement of extra QC checks on which it has no influence. Alternative to present cost allocations: Extra costs allocated only to departments that have requested superior numbers of QC checks. Normal
Extra
Total
Difference
F
50
1000
50000
20
11500
61500
11500
K
50
1000
50000
0
0
50000
0
P
15 115
1000
15000 115000
-5 15
0 11500
15000 126500
0 11500
Alternative to cost allocations: Different cost allocations such as using the number of direct hours per department, number of items actually verified per department, ABC, etc.
