The costs, which consist of interdepartmental cost allocations plus cost of support department are classified as ___________?
Correct answer: D. complete reciprocal costs
- A. flexible operating costs
- B. artificial costs
- C. operating costs
- D. complete reciprocal costs
Explanation
Complete reciprocal costs include the support department's own costs together with costs allocated from other departments, including reciprocal interdepartmental allocations. This distinguishes them from simple operating costs.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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