Which of the Following Is a Disadvantage for Using Budgeted

question 53

Multiple Choice

Which of the following is a disadvantage for using budgeted costs instead of actual costs for support department cost allocation?

• A) Managers know their exact costs in advance and have no incentive to minimize use of services.
• B) Budgeted costs do not reflect current usage, and so managers may overuse support services.
• C) Allocated support department costs are not under the manager's control.
• D) Support departments might be cut back because services are likely to be underused.

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