100.Because Fenwick Company has significant swings in its monthly production, the best way to allocate its plant manager's $58,000 annual salary is to allocate 1/12th
of the cost each month.
True False
101.Each indirect cost should be allocated to products individually to provide the most useful cost information.
True False
102.A cost pool should be made up of costs with a common cost object.
True False
103.The primary advantage of establishing cost pools is reducing the number of individual cost allocations that are made.
True False
104.Indirect costs should not be pooled unless they share a common cost driver.
True False
105.Once indirect costs are pooled, they must remain pooled for all allocations.
True False
106.Inaccurate allocation of joint costs to the individual products could cause an unprofitable product to appear to be profitable.
True False
107.To avoid the appearance that a joint product is incurring losses, a company might allocate joint costs based on relative sales value of each product at the split-off point.
True False
108.A company's total profit can be affected by the method used to allocate joint costs.
True False
109.Sometimes, several types of costs are accumulated into a single total for the purpose of cost allocation. This single total is referred to as a joint cost.
True False