Which of the Following Is a Disadvantage of a Dual-Rate

question 3

Multiple Choice

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

• A) It allocates fixed costs on the basis of budgeted long-run usage, which may tempt some managers to underestimate their planned usage.
• B) It may lead operating department managers to make sub-optimal decisions that are in their own best interest.
• C) It allocates fixed and variable-cost pool using the same cost-allocation base, which will mislead managers in making decisions.
• D) It does not guide department managers to make decisions that benefit both the organization as a whole and each department.

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Definitions:

Alfred Kinsey

A pioneering American sexologist known for his research on human sexuality and for developing the Kinsey scale.

Heterosexuals

Individuals who are sexually attracted to people of the opposite sex.

Homosexuals

Pertains to individuals who are attracted to members of their own sex, either emotionally, sexually, or both.

Deviance

Actions or behaviors that violate societal norms and expectations, often leading to negative sanctions.