Which of the Following Is a Disadvantage of Single-Rate Method

question 83

Multiple Choice

Which of the following is a disadvantage of single-rate method?

• A) It is very costly to implement.
• B) It may lead operating department managers to make sub-optimal decisions that are in their own best interest.
• C) It does not signal to department managers how variable costs and fixed costs behave differently.
• D) It requires managers to distinguish variable costs from fixed costs, which is often a challenging task.

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Definitions:

Volcanic Necks

Solidified lava within the conduit of an extinct volcano, exposed after the surrounding softer rock has eroded away.

Desertification

The converting of a land into a desert by natural or human causes.

Evaporation

The process where liquid water transforms into vapor and enters the atmosphere.

Precipitation

Any form of water - liquid or solid - falling from the atmosphere to the surface of the Earth, including rain, snow, sleet, and hail.