Which of the following statements is true? a.Support department cost allocations should be incorporated into the general accounting system but do not need to be incorporated into a product costing system. b.Support department cost allocations can be ignored for more accurate product costing. c.Support department cost allocations should be rolled into the general and administrative costs associated with the corporate office expenses. d.Support department cost allocations should be incorporated into a product costing system.

D. Support department cost allocations should be incorporated into a product costing system.

Explanation:Support departments provide essential support services for producing departments and by this the support department costs are part of the total product costs and must be assigned to the products through cost allocation from support departments to producing departments.

All manufacturing costs, direct and indirect must be assigned to the products produced to meet GAAP requirements.

The cost allocation method to use can be: a single charging rate, dual charging rate or allocation of costs.

Professional Golfers' Association of America (PGA)

Winnings at Different Points in Time

Year     Golfer                 Nominal              U.S. CPI          Winnings

                                Winnings (Dollars)  (1983 = 100)   in 2009 Dollars

1965    Jack Nicklaus     140,752                31.5               958,454  

1970    Lee Trevino        157,037                38.8               868,156  

1982   Craig Stadler      446,462               96.5              992,395  

2009  Tiger Woods  10,508,163              214.5           10,508,163

Explanation:

a) Data and Calculations:

Year     Golfer                 Nominal                U.S. CPI          Winnings

                                Winnings (Dollars)    (1983 = 100)   in 2009 Dollars

1965    Jack Nicklaus          140,752                 31.5

1970    Lee Trevino             157,037                38.8

1982   Craig Stadler           446,462               96.5

2009  Tiger Woods       10,508,163              214.5               10,508,163

Calculating the missing values:

Year     Golfer                 Nominal              U.S. CPI          Winnings

                                Winnings (Dollars)  (1983 = 100)   in 2009 Dollars

1965    Jack Nicklaus     140,752                31.5               958,454 (140,752*214.5/31.5)

1970    Lee Trevino        157,037                38.8               868,156 (157,037*214.5/38.8)

1982   Craig Stadler      446,462               96.5              992,395 (446,462*214.5/96.5)

2009  Tiger Woods  10,508,163              214.5           10,508,163