An Advantage of Using a Practical Capacity-Based Allocation Rate Is

question 16

Multiple Choice

An advantage of using a practical capacity-based allocation rate is:

• A)It does not change across products.
• B)It spreads all capacity costs over budgeted, rather than actual, volume.
• C)When there is idle capacity, capacity costs are spread over a smaller production volume.
• D)It does not change across periods.
• E)All of the above are advantages of using a practical capacity-based allocation rate.

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