What Is One of the Potential Disadvantages of NOT Allocating

question 148

Multiple Choice

What is one of the potential disadvantages of NOT allocating support department costs to production departments?

• A)total costs would not be accumulated
• B)managers may tend to overconsume these services
• C)this would encourage managers to monitor support department performance
• D)managers will use a support service at a more efficient level

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Definitions:

Promissory Note

A financial instrument that contains a written promise to pay a specified sum of money to another party at a determined future date or on demand.

Interest Revenue

Income earned from investments, such as savings accounts, bonds, or loans, calculated as a percentage of the principal sum.

Maturity Date

The specified date on which the principal amount of a financial instrument, such as a bond or loan, becomes due and payable.

Promissory Note

An economic vehicle that holds a firm promise made by one individual to another, obligating the former to deliver a certain amount of money, either when asked or at a future time that has been set in advance.