[amp_mcq option1=”primary distribution” option2=”secondary distribution” option3=”absorption” option4=”allocation” correct=”option1″]<\/p>\n
The correct answer is: A. primary distribution<\/strong><\/p>\n Departmentalization of overhead is the process of assigning overhead costs to specific departments or cost centers. This is done in order to better understand how much overhead is being incurred by each department and to make more informed decisions about how to allocate resources.<\/p>\n Primary distribution is the first step in the process of departmentalization of overhead. It involves assigning overhead costs to the various departments or cost centers within an organization. This is done by using a variety of methods, such as direct tracing, allocation, and apportionment.<\/p>\n Direct tracing is the most accurate method of assigning overhead costs. It involves assigning costs to departments or cost centers that can be directly linked to those departments or cost centers. For example, the cost of electricity used by a manufacturing department can be directly traced to that department.<\/p>\n Allocation is a less accurate method of assigning overhead costs. It involves assigning costs to departments or cost centers based on some arbitrary measure, such as square footage or number of employees.<\/p>\n Apportionment is a method of assigning overhead costs that is similar to allocation. However, apportionment takes into account the relative use of resources by each department or cost center. For example, the cost of heating and cooling a building can be apportioned to the various departments or cost centers based on the amount of space each department or cost center occupies.<\/p>\n Once overhead costs have been assigned to the various departments or cost centers, they can then be used to calculate the cost of goods sold or the cost of services provided. This information can be used to make more informed decisions about pricing, product mix, and other aspects of business operations.<\/p>\n The other options are incorrect because they do not accurately describe the process of departmentalization of overhead.<\/p>\n [amp_mcq option1=”primary distribution” option2=”secondary distribution” option3=”absorption” option4=”allocation” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-55821","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n\n