Asked by
Kameron Fountain
on Nov 17, 2024Verified
The underlying principle of allocating indirect operating expenses to departments is to assign to each department an amount of expense proportional to the revenues of that department.
Indirect Operating Expenses
Indirect operating expenses are costs associated with running a business that cannot be directly tied to a specific product or service, such as utilities, rent, and administrative salaries.
Allocating
The process of assigning or distributing resources or costs among various accounts, projects, or entities.
- Understand the purpose and method of allocating indirect operating expenses to departments.
Verified Answer
NT
Learning Objectives
- Understand the purpose and method of allocating indirect operating expenses to departments.
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