99) Revenue allocation is required to determine the profitability of individual items within a bundled
100) Under the incremental method, the first incremental user usually receives the highest allocation of
the common costs.
101) The incremental method of allocating common costs often creates the incentive to be the
102) The direct allocation method provides key information for outsourcing decisions regarding support
outsourcing decisions regarding support services. The direct allocation method does not
provide this information.
103) The direct allocation method highlights recognition of services rendered by support departments to
other support departments.
104) The dual cost-allocation method classifies costs into two pools: a budgeted cost pool and an actual
105) Budgeted amounts for a support department will always exceed complete reciprocated costs for
106) The only methods available when allocating the revenues across a bundled product offering are: 1)
the stand-alone revenue-method; and 2) the incremental revenue-allocation method.
107) The stand-alone method may use selling price or unit costs to allocate revenues. 107)
108) An example of a bundled product is when a resort hotel charges a single price for lodging, food,
and recreational activities.