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.