Consider the Following Statements About Dual-Cost Allocation

question 41

Multiple Choice

Consider the following statements about dual-cost allocation:
I. Dual-cost allocation prevents a change in the short-run activity of one department from affecting the cost allocated to another department.
II. Dual-cost allocations create an incentive for user department managers to understate their expected long-run service needs.
III. Dual-cost allocations are generally preferred over lump-sum allocations, or those that combine variable and fixed costs together.
Which of the above statements is (are) true?

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

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Definitions:

Myelination

The process of coating the axons of neurons with a fatty layer, myelin, which speeds up the transmission of electrical signals in the nervous system.

Myelin Sheaths

The fatty covering that wraps around the axons of many neurons, which helps increase the speed at which electrical impulses propagate along the nerve cells.

Neuron's Axon

The long, slender projection of a neuron that conducts electrical impulses away from the neuron's cell body.

Auditory Cortex

The part of the brain that is responsible for processing auditory information, situated in the temporal lobe and critical for interpreting sounds and language.