Advantages of Using Budgeted Values to Calculate Support Department Cost

question 63

Multiple Choice

Advantages of using budgeted values to calculate support department cost allocation rates include:
I. Managers know support department costs in advance
II. Managers are motivated to use support department services efficiently
III. Allocated support costs for the period are not affected by actual usage so managers have little incentive to minimize the use of support services

• A) I and II only
• B) I and III only
• C) II and III only
• D) I, II, and III

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Definitions:

Enforce

To compel compliance with a law, rule, or obligation through authoritative or legal action.

Oral Assignment

The act of transferring rights or property through verbal agreement, without the need for written documentation.

Statute

A written law passed by a legislative body at either the federal or state level.

Assignee

An individual or entity to whom rights or interests have been transferred by another party, known as the assignor.