If a Budgeted Activity Base Is Used as the Base

question 22

Multiple Choice

If a budgeted activity base is used as the base in cost allocation, each department's cost allocation will be predictable, and not influenced by the:

• A)Actual total cost.
• B)Change in activity.
• C)Variations from budget.
• D)Errors in calculations.
• E)Actual usage in other departments.

---

Definitions:

Marketable Securities

Liquid financial instruments that can easily be converted into cash, often used for short-term investments.

Cash Balances

Available cash on hand or in bank accounts that a company uses for daily operations.

Investments in Inventory

Funds allocated by a business to purchase goods and materials held for resale or production.

Minimum Costs

The lowest amount that can be spent on the production of a good or service while maintaining its quality.