Devon allocates support department costs using the direct method and estimated costs. The support department costs are
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A. Allocate budgeted support department costs using the direct method, first using labour hours and then with the outside cost proportions as the allocation bases.
B. Could Devon use the cost of purchasing externally as an efficiency benchmark for the cost of both the support departments and the user departments? List several advantages and disadvantages of this approach.
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Related Book For
Cost Management Measuring, Monitoring and Motivating Performance
ISBN: 978-1119185697
3rd Canadian edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott, Liang Hsuan Chen, Gail Cook
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