90.The goal in allocating a cost to cost objects is to achieve a rational allocation.
True False
91.Cost allocation is the process of dividing a total cost into its fixed and variable components.
True False
92.The most useful cost driver for allocating a particular cost is the one with the strongest cause-and-effect relationship.
True False
93.Blanton Company wishes to allocate rent expense of $24,000 to its three operating departments, A, B, and C. Assuming the three departments occupy 10,000, 20,000 and 30,000 square feet respectively, the cost allocation rate for Department C is $0.80 per square foot.
True False
94.Volume measures serve as good cost drivers for allocating variable overhead costs because of the causal relationship that exists between those drivers and variable costs.
True False
95.A company may use several different cost drivers to allocate its indirect costs.
True False
96.Sometimes, volume-based cost drivers are used to allocate fixed indirect costs.
True False
97.The selection of the most appropriate cost driver often requires considerable judgment in the absence of a strong cause-and-effect relationship.
True False
98.Wayne Company wishes to allocate overhead costs in a heavily automated production department. Direct labor hours would be a less appropriate cost driver than machine hours.
True False
99.A predetermined overhead rate is calculated using estimated or predicted cost and volume data.
True False