A Key Disincentive Effect of Departmental Cost Allocation Can Occur

question 51

Multiple Choice

A key disincentive effect of departmental cost allocation can occur when:

• A)allocated costs are less than external purchase costs.
• B)managers do not understand the incentives in the allocation base.
• C)the allocation base is actual usage.
• D)the allocation base is budgeted usage.
• E)the allocation base is greater than usage.

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Definitions:

Contingent Liability

A potential financial obligation that may occur, depending on the outcome of a future event.

Huntington National Bank V.Guishard

This likely refers to a specific legal case or decision involving Huntington National Bank and an individual or entity named Guishard, but without additional context, a detailed definition cannot be provided.

Deposit Slip

A document that accompanies bank deposits, detailing the amount of cash and checks being deposited as well as the deposit account number.

Personal Liability

The legal responsibility of an individual to personally satisfy debts or obligations, as opposed to the liability being limited to the assets of a business or corporation.