Discuss reasons for allocating costs to departments

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1. Name some of the costs and benefits of cost allocation.

2. A critic of cost allocation noted, ‘‘You can avoid arbitrary cost allocations by not allocating any costs.'' Comment.

3. Discuss reasons for allocating costs to departments.

4. Your division operates a joint production process. Management of the company has decided to shut down your division and liquidate all assets because the division no longer provides a competitive return. Prepare an outline of the costs and benefits (to all affected parties) of the decision to shut down and liquidate your division.

Reference no: EM13902734

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